Dodd paints bleak picture for auto bailout

Prospects for a
multi-billion-dollar auto industry bailout appeared to be slipping away
Thursday but Sen. Chris Dodd vowed to keep working.

Lawmakers have yet to reach a compromise on the rescue package requested by the Detroit companies and Dodd, the chairman of the Senate Banking Committee, painted a dismal portrait of their progress while speaking with reporters after a nearly six-hour hearing where chief executives from the Big Three automakers pleaded for nearly $34 billion in aid.

{mosads}Dodd (D-Conn.) said he’s not sure how lawmakers can proceed with plans to help the industry without “some consensus of both the House and the Senate of how to move forward” and stepped up pressure on the White House to take executive action to deal with the problem in the short term.

“We’ve got to be a lot further along than we are today,” Dodd said.

Coming up with a congressional solution is a very “tall order to try to get done in three days, four days before next week.” But he added that he had a “working situation” right now and the makings of putting something together.

Sen. Carl Levin (D-Mich.), working closely with the Big Three automakers as they made their case to lawmakers, is stepping up efforts to persuade the Bush administration to use money from the $700 billion financial rescue package to help the carmakers. The White House has been opposed to any money from that package going to Detroit.

Levin said the path to a congressional solution is subject to “many traps and hurdles”, yet the impact would be dire on the country’s financial system should one or more of the Big Three go under.

“I believe there is a new path which has now opened up which will hopefully lead to the administration acting and to a solution being found,” Levin said.

Levin said that should the administration not act before Monday, that he predicted Congress would return and try to craft a solution. “If that doesn’t happen in the next couple days then we could come back to work legislatively,” he said. “It’s very cumbersome for Congress to act. There were so many different approaches thrown out there.”

Dodd also pointed to the Bush administration to act. He said Treasury Secretary Henry Paulson, traveling in China at the moment, should return and immediately address the auto crisis.

“It’s time to come home,” he said.

Dodd suggested that in case a congressional solution is impossible, he intends to talk with the Treasury Department and the Federal Reserve to send a stopgap amount of money to the industry. That could be a short-term solution in tandem with a congressional package, or a stand-alone effort. The United Auto Workers union president said he did not believe General Motors — the company in the most dire situation of the three — would survive the year unless aid is forthcoming.

Dodd was highly critical of the Bush administration and speculation that Paulson will ask Congress for access to the final $350 billion of the $700 billion financial rescue package passed in October. Dodd had requested that the Treasury and Federal Reserve testify at the hearing today, but they did not show.

“I’m through with giving this crowd money to play with,” Dodd said of the Bush administration.