President Bush on Friday said he supports lending billions of dollars to U.S. automakers as the heads of Detroit's Big Three appeared again before Congress to plead for a bailout.
Lawmakers, too, seemed to be moving reluctantly toward a consensus that something needs to be done to keep General Motors Corp., Ford Motor Co. and Chrysler LLC — companies that directly or indirectly account for the employment of hundreds of thousands of workers — from going under.
The sticking point was where the money should come from. The White House insists that the money should come from modifying a $25 billion Energy Department loan program meant to promote fuel-efficient technologies, while congressional Democrats say it should be drawn from the $700 billion financial industry bailout.
"We believe this is the least costly alternative," Chrysler CEO Bob Nardelli told the House Financial Services Committee.
Key lawmakers have also called on the Federal Reserve to give the auto companies the kind of direct low-cost loans the central bank has been awarding to financial firms.
As the CEOs appeared before lawmakers for a second day Friday, Bush said he was concerned about the viability of the automobile companies.
"I am concerned about those who work for the automobile companies and their families," he told reporters at the White House, using the word "recession" for the first time to describe the state of the nation's economy. "Likewise, I am concerned about taxpayer money being provided to these companies that may not survive."
Rep. Barney Frank (D-MA), chairman of the financial services committee, urged action, noting unemployment figures released earlier Friday showing the biggest monthly job loss in 34 years.
"For us to do nothing, to allow bankruptcies and failures in one or three of these companies in the midst of the worst credit crisis and the worst unemployment situation that we've had in 70 years, would be a disaster," he said.
Last month, the auto company executives were sent home empty-handed and told to come back with more detailed plans of how they would spend the money and restructure their companies. From the time the CEOs first appeared two weeks ago, their request increased from $25 billion to $34 billion.
"I don't want to send you home again, because it's going to get more expensive," joked Rep. Gary Ackerman (D-NY).
Several lawmakers pressed automakers to consider a pre-negotiated bankruptcy, which the companies have shunned.
While Bush stuck to his insistence that the fuel-efficiency fund be utilized, President-elect Barack Obama was not stepping forward with an alternative.
Frank complained that Obama is "going to have to be more assertive than he's been."
From wire reports