GOP Senators Could Derail House's Auto Bailout

A proposed bailout of the U.S. auto industry has passed its first test in Congress. The House has approved a bill to give struggling automakers $14 billion in emergency government loans. It was a compromise worked out by Democratic leaders and the Bush White House. A much tougher test awaits in the Senate, where a Republican revolt is under way.

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STEVE INSKEEP, host:

It's Morning Edition from NPR News. Good morning, I'm Steve Inskeep. If your future is tied up in General Motors, Ford, or Chrysler - tied up because of your work, your stock, your pension, or where you live - we cannot tell you yet if those companies will get federal help. A proposed bailout for the auto industry passed its first test in Congress last night. The House approved $14 billion in emergency loans, and President Bush favors the plan. That brings the measure no closer to passing fierce opposition in the Senate. NPR's Debbie Elliott reports.

DEBBIE ELLIOTT: The most impassioned pleas for the auto bailout on the House floor came from the Michigan delegation.

Representative JOHN DINGELL (Democrat, Michigan): This is a bridge loan. Without this bridge, we're going to fall into the deepest calamity this country has seen since the Great Depression.

ELLIOTT: That's Michigan Democrat John Dingell, the dean of the House, who has served for 53 years, all of them as a staunch advocate for the automobile industry.

Representative DINGELL: I call on you to note that one in seven jobs in this country is in the auto industry. Put these companies into bankruptcy, and you will bankrupt the entire industry, from the dealers to the suppliers to the small-business men who depend upon this. I'm here to tell you this is too big a disaster for us to invite. Imagine a nation with double-digit unemployment. That's what we're going to be talking about.

ELLIOTT: The bill would let GM and Chrysler immediately draw on the government loans to stay solvent. Ford would be eligible, but has said it doesn't need help for now. In exchange for the emergency aid, the companies would be forced to restructure under the supervision of a presidentially appointed car czar. That idea drew fire from Republican opponents of the bill, including Alabama's Spencer Bachus, the ranking Republican on the House Financial Services Committee.

Representative SPENCER BACHUS (Republican, Alabama): The wisdom of Washington. It's clear that the management of these companies have made mistakes. But to set up a command and control in Washington, D.C., with a federal bureaucrat attempting to run the domestic automobile industry is exactly the wrong solution.

ELLIOTT: GOP opposition wasn't enough to stop the auto bailout from clearing the House, but it's a different story in the Senate where Republicans have enough votes to derail the bill. They're floating a number of alternatives, notably government-assisted bankruptcy reorganization. Senate Minority Whip Jon Kyl of Arizona says that's the best way to insure the long-term viability of the industry.

Senator JON KYL (Republican, Arizona; Senate Minority Whip): I personally believe that the kind of authority that Chapter 11 provides may be the only way to force the kind of concessions that need to be made for the companies to end up competitively.

ELLIOTT: The White House has called the House-passed legislation an effective and responsible approach to deal with troubled automakers and ensure the necessary restructuring occurs. Chief of Staff Joshua Bolten was on Capitol Hill yesterday for closed-door talks with Republican senators, but found it a tough sell for lawmakers already angry with the way the administration has handled the $700 billion financial bailout.

Senator BOB CORKER (Republican, Tennessee): I think they had less support when they left than when they came in.

ELLIOTT: Tennessee Senator Bob Corker.

Senator CORKER: I think people realize that this bill is an incredibly weak bill. It's the product of an administration that wants to kick the can down the road and let somebody else deal with it. And I think it has minimal, very little support in our caucus.

ELLIOTT: Senate leaders are looking for a compromise and say they hope for a vote by the end of the week. Debbie Elliott, NPR News, the Capitol.

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