Senate auto bailout falls apart

Following a week of sputtering and stalling, a measure intended to
provide short-term help to the ailing auto industry was blocked in the Senate
Thursday night.

Senators came up
short on a procedural vote that would have cleared the way for the $14 billion rescue
package, voting 52-35 – 8 votes shy of the 60 needed.

{mosads}While the bill’s prospects looked dim for most of the day, with most
Republicans and some Democrats opposed to giving bridge loans to domestic
carmakers, Senate leaders were briefly confident to reach a deal late in the
day.

However, in the end, the reservations of the majority of Republicans
about making available taxpayer funds to the automakers weighed more heavily
than President Bush’s lobbying efforts and gloomy predictions of what would
happened to the economy if a deal was not reached.

“We have not been able to get this over the finish line,” said Senate
Majority Leader Harry Reid (D-Nev.). “There is too much difference between the
two sides… I dread looking at Wall Street tomorrow. It’s not going to be a
pretty sight.”

“We’ve reached an impasse for the moment,” said Minority Leader Mitch
McConnell (R-Ky.).

“We are deeply disappointed that agreement could not be
reached tonight in the Senate despite the best bipartisan efforts,” said a GM
spokesman. “We will assess all of our options to continue our restructuring and
to obtain the means to weather the current economic crisis.”

Republican Sens. Kit Bond (Mo.), Sam Brownback (Kan.),
Elizabeth Dole (N.C.), Pete Domenici (N.M.), Richard Lugar (Ind.), Olympia
Snowe (Maine), Arlen Specter (Pa.), George Voinovich (Ohio) and John Warner
(Va.) voted with the Democrats.

Democrats Max Baucus (Mont.), Blanche Lincoln (Ark.) and
Jon Tester (Mont.), as well as Reid for procedural reasons, voted against
cloture.

Sens. Lamar Alexander (R-Tenn.), John Cornyn (R-Texas),
Larry Craig (R-Idaho), Lindsey Graham (R-S.C.), Chuck Hagel (R-Neb.), Edward
Kennedy (D-Mass.), John Kerry (D-Mass.), Gordon Smith (R-Ore.), Ted Stevens
(R-Alaska), John Sununu (R-N.H.) and Ron Wyden (D-Ore.) as well as Vice
President-elect Biden did not vote. President-elect resigned from the Senate
earlier this month.

The final bill closely followed a compromise proposal pitched by Sen.
Bob Corker (R-Tenn.), which would have required automakers who accepted
federal aid to reduce two-thirds of their outstanding debt through an equity
swap with bondholders. Corker’s plan would also have required that labor costs
at participating companies be brought on par with foreign competitors such as
Nissan, Toyota and Honda.

Senators said the final impasse was over that last provision, between
the United Auto Workers (UAW) union and Senate Republicans. The UAW resisted to
a specific date by which they would agree to “wage parity,” while the GOP was
insisting on a more immediate date in 2009.

The bill’s failure leaves the White House as the only remaining
lifeline for the Big Three. President Bush, however, has consistently resisted
helping the automakers by tapping into the $700 billion that Congress
appropriated in October to shore up the U.S. financial system.