Deal reached on auto bailout

Democratic leaders in Congress struck a last-minute deal with the White House late Friday on a rescue plan for the U.S. auto industry, according to Congressional sources, bringing a breakthrough to two days of frustration among auto executives, congressmen and the public.

“There is a deal with Dem leaders” and the White House, a senior Democratic aide said late Friday night after a day in which the ‘Big Three’ automaker executives testified before the House Financial Services Committee.

{mosads}Details were forthcoming, but the deal is likely to involve $25 billion in loans that Congress has already appropriated for the industry to retool its manufacturing plants to build more energy-efficient cars. Democrats had long resisted using that money to help the industry for fear that the money would not be replaced and such strides towards environmental responsibility would never happen.

Friday’s news of 533,000 job losses from the U.S. Labor Department changed that outlook, however, leading to Friday night’s breakthrough agreement. Sources said Democratic congressional leaders sought assurances that the money would be replaced and that energy-efficiency goals would not be sacrificed.

“Today’s announcement of major job losses and findings from Congressional hearings from the last two days make it clear that Congress must work on a bipartisan basis to provide short-term and limited assistance to the automobile industry while it undertakes major restructuring,” said House Speaker Nancy Pelosi (D-Calif.) in a statement.

Silla Brush and Mike Soraghan contributed to this article.