Frank predicts second auto bailout in March

Rep. Barney Frank said Monday that the incoming Obama administration will likely explore a second, long-term bailout of automakers next March while saying an agreement on the first is nearly complete.

The chairman of the House Financial Services Committee said in an interview with CNBC that a short-term agreement between congressional Democrats and the Bush administration is expected by the end of the day.

{mosads}”There will be a short-term bill that will give them some money,” Frank (D-Mass.) said in the interview. “There should be an agreement by the end of today.”

Frank said the agreement would likely be a $15 billion loan package, with funds taken from a previous, $25 billion loan package approved by Congress to bolster automakers’ efforts to make their products more energy-efficient.

“We don’t think the $15 billion is enough to get them into March, but given the administration’s insistence … that’s where we are now,” Frank said.

Frank said that in the new Congress, which will have stronger Democratic majorities and a friendlier White House, the funds taken from the energy loans this year to prop up the ailing industry would be restored.

“Once we get a new administration we will replenish that money,” he said. “We will not see a diminution of funding available for energy efficiency.

“The reason for that is that then you get the new administration — the Obama administration — able to take it up from there and make the longer-range projections,” he added.