$15B vote for Big Three

Congressional Democrats and the White House are closing in on a $15 billion package to prop up the American auto industry, setting up a difficult final Senate vote as its last action of the 110th Congress.

Some Senate Republicans, including Sens. George Voinovich (Ohio), Kit Bond (Mo.) and Arlen Specter (Pa.), have made it plain they will vote for the bailout, but it’s unclear whether there will be support to pass the bill.

Asked on “Fox News Sunday” whether the votes were there, Sen. Carl Levin (D-Mich.), the industry’s main advocate on Capitol Hill, said, “That’s obviously a much more complicated question.”

Senate Democrats might need 12 Republican votes to cut off debate because two of their own, Vice President-elect Biden and Sen. Hillary Rodham Clinton (D-N.Y.), recently named Obama’s nominee for secretary of State, will probably abstain.
Sen. Richard Shelby (R-Ala.) on Sunday left open whether he and others are considering a filibuster. “I think we need to debate it,” Shelby told Fox. “That’s what filibuster is about.”

{mosads}Sen. Bob Corker (R-Tenn.) said this weekend that he was “disappointed” in the plan and believes a bankruptcy proceeding would be preferable.

On Saturday, Senate Minority Leader Mitch McConnell (R-Ky.), who represents a state heavy with auto plants, expressed willingness to consider legislation.

“I look forward to reviewing the legislation being drafted to address the difficulties in our auto markets,” he said, adding: “Our first priority must be to protect the hard-earned money of the American taxpayer.”

The Senate will return Monday to consider the legislation, drafted over the weekend by the Senate Banking Committee and the House Financial Services Committee. Senate Democrats aim to have a vote on Tuesday night or Wednesday.

The White House said this weekend that talks with Congress were “constructive” and that the two sides, in opposition for weeks, were making progress.

If the bill passes the Senate, it will then likely head to the House, where members are set to reconvene on Tuesday.

Sen. Jeff Sessions (R-Ala.), on “Face the Nation,” said chances for a positive vote were better, but he would not predict an outcome. He and Shelby represent a state with a large foreign automaker presence. Sen. Jon Tester (D-Mont.) and other Senate Democrats also remain undecided.

Lawmakers were jolted by Friday’s news that the economy lost 533,000 jobs in November. The prospect of further widespread layoffs in the event of automaker bankruptcies breathed new life into the bailout. Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee, said that allowing the automakers to fail would be “piling disaster on disaster.”

“This would be a bridge, not a bailout,” said Sen. Chris Dodd (D-Conn.), chairman of the Senate Banking Committee and the man in charge of drafting the legislation over the weekend.

“None of us like this at all,” Dodd said on “Face the Nation.” “There is a lot of reason to be furious. But there is a lot more at stake than just Detroit. If this were just about Detroit, I’d let them fail in a New York minute.”

The Big Three’s dire situation and Friday’s dismal jobs report led to a major concession from House Speaker Nancy Pelosi (D-Calif.). She dropped her longstanding opposition to the White House proposal to allow money previously allocated to help the companies develop fuel-efficient cars to be used instead for immediate cash needs.

Pelosi agreed late Friday that money could come from this $25 billion, appropriated to the Energy Department. Pelosi said there must be a “guarantee that those funds will be replenished in a matter of weeks so as not to delay that crucial initiative.”

This is the second year in a row that Pelosi has had to make a major end-of-session concession to the White House, despite the political weakness of President Bush. In December 2007, she agreed to cut spending to levels demanded by Bush to avoid the veto of 11 spending bills compiled into an omnibus bill.

The auto package would support the car industry through March and envisions a longer restructuring process carried out in part under President-elect Obama’s administration. Obama, appearing on “Meet the Press,” said he is hopeful that Bush and Congress will find “some short-term progress” in coming days.

The package will primarily help General Motors Corp. and Chrysler LLC because they are in more dire financial straits than is Ford.

The bailout debate comes amid expectations that Treasury Secretary Henry Paulson will seek access to the rest of the $700 billion financial rescue package passed in October. He had indicated that he intended to leave the last $350 billion to the Obama administration, but with six weeks to go, Paulson may need more money to allay volatile markets. Congress would have to grant the administration access to the money, or it could choose to legislate new restrictions on the funds.

A request by Paulson could complicate an already difficult political debate over the auto bailout. Congressional lawmakers from both parties are skeptical of granting Paulson more authority, and Democrats have pressed the administration to use some of the money to modify mortgages to curtail foreclosures.

Last week, Dodd adamantly opposed granting such authority short of new restrictions on how the money is spent. “I’m through with giving this crowd money to play with,” he said, referring to the Bush administration.

Democrats are working to institute restrictions on how the auto bailout money is used. Dodd said on Sunday that Rick Wagoner, GM’s CEO, should step down as part of any government-supported restructuring. “I think he has to move on,” Dodd said. The bill may also require that the automakers give up their fight against California’s emission standards.

Senate Democrats are considering setting up a single trustee position, a car czar, to help oversee the restructuring of the industry. Sen. Charles Schumer (D-N.Y.) suggested that a single trustee, appointed by the president, should oversee the process. Levin said that under plans being considered, an administrator would be selected in the next two to three months.

It is  also unclear how lawmakers will change the terms of the Energy Department loans, with the Congressional Budget Office saying last week that the industry could receive only $7.5 billion under existing legislation.

The two days of congressional hearings last week were a second, and perhaps last, chance for the Big Three to make their case to Congress after their much-maligned November testimony.

The companies have conveyed an increasingly dire financial situation, with their request for financial help increasing from $25 billion in November to $34 billion this month. GM, seeking $18 billion in aid, said that it might not be able to survive the month without an infusion of capital.