Agreement Nears On Auto Bailout
STEVE INSKEEP, host:
Now let's talk about what's next for the auto companies which are closer to getting the money they say they need to survive. House Democrats and the White House last night agreed on the broad strokes of a bailout plan. Now the challenge is to win over Senate Republicans who have the power to block the $15 billion in loans. NPR's Brian Naylor is covering this story. He joins us now, live. Brian, good morning.
BRIAN NAYLOR: Hi, Steve.
INSKEEP: Been a lot of talk about what might be in this agreement. What's actually in it?
NAYLOR: Well, it's pretty much as we've been reporting the past few days this week. It makes available $15 billion for GM and Chrysler, both of whom say they need large infusions of cash in order to stay in business, and they need that money soon. Under the agreement, the automakers would have to cut costs, including labor and management. They'd have to negotiate with their creditors and show they have a viable path to profitability by March 31. Otherwise, they'll get no further taxpayer dollars and they'll have to start repaying those loans. They can't pay any dividends to shareholders or bonuses to executives, and they'll have to sell those corporate jets. And the government will also get a share in future profits.
INSKEEP: Now, Brian, in past days there's been talk of a possible car czar, as it was described - some federal official who might, more or less, tell the car companies what to do, the way that a bankruptcy judge might. Is there any part of that in this plan?
NAYLOR: Well, yes. The car czar is still part of the plan. And in fact the powers of this person have been the biggest stumbling block in the negotiations. The questions - you know, how much authority will this person have? Will he or she be able to call in the loans if the automakers don't comply with its terms? How much authority the czar should have over the spending of the carmakers? And can a car czar force the automakers into bankruptcy if there's no viable future?
These are all things that have bogged down the talks. But the sides now feel they have a working agreement that this czar will have that kind of authority. One point, Steve, that's not resolved, apparently, is whether the car companies must drop their suits that they've filed in states like California, which have stricter clean air rules than the federal regulations. This is something the Democrats want to force them to do, but Republicans say it should be left out of the measure. And that's apparently still a little bit up in the air at this point.
INSKEEP: Brian, when you say the sides have agreed on what this car czar will have the power to do and on the other terms of this, you're talking about the House leadership and the White House, right?
NAYLOR: That's right. The House leadership, the Senate leadership. And these, I should say, are Democrats. The negotiations that have been going on have mostly been between Democrats in Congress and the Bush administration. Republicans in Congress have for the most part been left out of the talks.
INSKEEP: And Republicans in the Senate still have the votes to block this?
NAYLOR: Well, that's right. As you know, it takes 60 votes to get most anything major done in the Senate. And so there's a real question whether this measure is going to be able to get through. There's a group of conservative Republicans who are vehemently opposed. They think the car companies should be forced to declare bankruptcy under Chapter 11. And they say they're going to force a drawn-out debate over this. It could last into the weekend and into next week.
The administration's going to be trying to convince Republicans to vote for the deal. They're sending emissaries up for a lunchtime meeting today. But, you know, Steve, the president's got a little over a month left in office, and he doesn't have much in the way of powers of persuasion at this point. And frankly, members of both parties, Democrats and Republicans, are just tired of all of these bailouts. It's bailout fatigue.
INSKEEP: Have carmakers indicated exactly how much time is left? If you start running out the clock as a Republican senator, how much time do you have to withstand the pressure in order to basically cause the - force the car companies to go into bankruptcy without federal help?
NAYLOR: Well, GM has said that if they don't get four billion by the end of the month, then they're going to have a tough time making it into the New Year. The end of the month is, what, about two and a half weeks away at this point. So, there is a lot of pressure. This is a high-stakes poker game that's being played out right now, and we're going to see who's got them, who's going to hold them, and who's going to lay them down.
INSKEEP: Brian, thanks very much.
NAYLOR: All right, Steve.
INSKEEP: NPR's Brian Naylor covers Congress, and he's been covering the plans for an auto industry bailout. We're told that Democratic leaders in Congress have reached an agreement with the White House. The question is whether Republicans in the Senate can be persuaded to go along.