WASHINGTON — Weary Democratic congressional leaders and White House officials agreed in principle Tuesday on a $15 billion bailout of U.S. automakers that would give the government extraordinary power to restructure the floundering industry. But the rescue faced snags as Republicans raised deep concerns.
Congressional aides and a senior administration official said the proposed deal would speed the loans to Detroit's struggling car companies and place a "car czar" named by President George W. Bush in charge of overhauling the auto industry. Congress could vote on the plan as early as today and the money could be disbursed within days.
"Bipartisan hard work has paid off and I understand an agreement has been reached," Sen. Carl Levin of Michigan said in a statement. "This gets us to the 20-yard line, but getting over the goal line will take a major effort, particularly in the Senate, where we need 60 votes."
A breakthrough came when negotiators reached a compromise to require the czar to revoke the loans and deny any further federal aid to automakers that don't strike a deal with labor unions, creditors and others to ensure their survival by next spring — essentially pushing them into bankruptcy.
"A great deal of progress has been made on auto legislation that will protect the taxpayer and ensure that short-term financing is available only to companies prepared to undertake the dramatic restructuring necessary to become viable and competitive," Dana Perino, the White House press secretary, said late Tuesday.
Staff aides worked into the night fine-tuning legislative details of the agreement. It could face substantial obstacles from congressional Republicans, who remained skeptical of the White House-negotiated plan. A group of conservatives led by Sen. John Ensign, R-Nev., has threatened to block the measure.
A further stumbling block was Democrats' refusal to scrap language, vehemently opposed by the White House, that would force the carmakers to drop lawsuits challenging tough emissions limits in California and other states.
That measure "kills the deal," said Dan Meyer, Bush's top lobbyist.
Senior Democratic aides acknowledged as much Tuesday and said they expected the provision to ultimately be dropped.
Democrats optimisticLeading Democrats voiced optimism that a deal would be reached.
"There do not appear to me to be differences in principle of a sufficient nature to blow this thing up," Rep. Barney Frank, D-Mass., the Financial Services Committee chairman, told reporters.
The core of the bill, like its aim, was not in dispute among the White House and Democratic leaders. It would provide emergency loans to two of Detroit's Big Three — Ford Motor Co. has said it doesn't need an immediate cash transfusion — and create the car czar. The federal overseer would supervise a broad industry restructuring and would be empowered to pull the money back if the carmakers weren't doing enough to ensure their own survival.
All the while, the nation has fallen into recession, Congress and the presidency are both in transition, Wall Street is ricocheting daily, and the Federal Reserve and Bush Treasury Department are fighting to steady the reeling financial industry.
Sen. Mitch McConnell, R-Ky., said he was concerned that Democrats were proposing a package that "fails to require the kind of serious reform that will ensure long-term viability for struggling automobile companies."
With their approach, "we open the door to unlimited federal subsidies in the future," McConnell said.
The White House has said it shares those concerns.
"There will not be long-term financing if they can't prove long-term viability," Perino said.
However, she also said, "I think overall we're headed in the right direction."
Getting 60 votes for an agreement, with many senators expected to be absent for the emergency, post-election debate, could be tricky.
Said Levin, D-Mich., an ally of the auto industry: "This is a real hill to climb even if we can get agreement between the White House and congressional leaders."
The current Congress is ready to depart for the year after this week.
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