WASHINGTON — Democratic leaders began laying out conditions Friday that they say Detroit's Big Three automakers need to meet before Congress will consider giving them an emergency $25 billion lifeline.
House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid were drafting a letter Friday to the U.S. auto executives requesting specific information on how federal loans would help them survive.
The assignment is meant to give General Motors Corp., Ford Motor Co. and Chrysler LLC another chance, after a disastrous pair of hearings this week on Capitol Hill, to make their case to lawmakers and the public, she said.
"It's another opportunity for them to say to the American people, 'Give us your money, because we will put it to good use,' " Pelosi, D-Calif., told reporters.
The embattled companies have 12 days to get back to the skeptical Congress, after top Democrats scrapped planned votes on an auto bailout they said lacked support or a clear justification.
"The executives of the auto companies have not been able to convince Congress or the American people that this government bailout will be its last," Reid said Thursday.
Hearings are expected the week after next, and lawmakers could consider legislation during the week of Dec. 8, but only if the industry shows that taxpayers and autoworkers would be protected, congressional leaders said.
U.S. automakers are struggling to stay afloat heading into 2009 amid an economic meltdown, a precipitous drop in sales and a tight credit market. The three companies burned through nearly
$18 billion in cash reserves during the last quarter and GM and Chrysler have said they could collapse in weeks.
Detroit's carmakers employ nearly a quarter-million workers, and more than 730,000 other workers produce materials and parts that go into cars. If just one of the automakers declared bankruptcy, some estimates put U.S. job losses next year as high as 2.5 million.
White House spokeswoman Dana Perino called the Democratic plan "mind-boggling."
"How in the world are 535 members of Congress going to determine the viability of a company?" she said. "They can't even get together to pass a Mother's Day resolution."
Perino spoke to reporters while flying with President George W. Bush to an economic summit in Peru.
Congress is weighing a tricky political question: Should it spend billions more on unpopular government bailouts, or run the risk of bearing the blame of a U.S. auto industry meltdown?
Another loan on tableThe White House and congressional Republicans said lawmakers should have considered a bipartisan plan to let the automakers tap a separate $25 billion loan program for fuel-efficient cars for their short-term cash needs.
Senate Republican Leader Mitch McConnell
of Kentucky described Democrats' stop-and-start attempts to push through the auto bailout as a "bizarre and confusing" spectacle during this week's post-election congressional session. He said the White House-backed plan "would be a way to get a law," but he wouldn't say whether he believes Congress should return next month to address the auto industry's predicament.
"I think we all accept that they're in serious trouble. No one is happy about that, but what to do about it remains to be seen," McConnell said.
Supporters of the bipartisan measure to temporarily divert the fuel-efficiency funds to cover the auto companies' operations said they hope to win support in December. "We need speed. This is a very, very important moment," said Sen. Carl Levin, D-Mich.
But Pelosi reiterated her opposition to that approach, which is vehemently opposed by environmentalists jealously guarding that money for the development of cars that use less gasoline.
"It's like taking your kids' college education fund and spending it on your credit card bills," Pelosi said.
Gutierrez said it's more like dipping into a young child's college fund to pay for surgery that's needed to save his life.
"There will be time to replenish the fund, but what really matters is to save the life of the child," the commerce secretary said.
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