Murky future for auto rescue amid GOP opposition

[Mrs. Sharon B. Hodge]

Murky future for auto rescue amid GOP opposition
By JULIE HIRSCHFELD DAVIS and KEN THOMAS,


WASHINGTON – Prospects for passage of a $14 billion auto industry rescue package dimmed Thursday amid strong Republican opposition, despite urgent appeals by both President-elect Barack Obama and the Bush White House.


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Auto Bailout Heads to Senate

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Senate Republican Leader Mitch McConnell came out against the legislation — the product of a hard-fought behind-the-scenes compromise between the majority Democrats and the White House. And not even the White House's argument that it was crucial at a time of rising joblessness seemed to restore lost momentum for enactment.

Proponents scrounged for the votes to clear the legislation as early as Thursday afternoon. President George W. Bush was lobbying for the bill, as well, arguing that the economy can't stand massive new layoffs.

But McConnell said the measure "isn't nearly tough enough." The Kentucky Republican also called for a different bill — one that would force U.S. automakers to slash wages and benefits to bring them in line with Japanese carmakers Nissan, Toyota and Honda — in return for any federal aid.

That approach was virtually certain to be a nonstarter among Democrats who count labor unions among their strongest supporters.

The stalemate highlighted the difficulty of pushing another rescue package through a bailout-fatigued Congress, particularly one designed to span the administrations of a lameduck president and his successor. Oddly, they were united in pressing hard for its swift approval.

In Chicago, Obama told reporters that the government can't just stand by and watch the industry collapse, saying that would have a "devastating ripple effect" throughout the economy.

Earlier, just after the Labor Department reported new applications for jobless benefits were at their highest level in 26 years, White House Press Secretary Dana Perino said the country couldn't afford an auto industry meltdown: "We don't think the economy can sustain it," she said.

On Capitol Hill, patience was wearing thin as the clock ticked down on the current Congress and Democratic leaders were short of the votes they would need to pass the measure.

Sen. Harry Reid, D-Nev., the majority leader, called for swift separate votes Thursday on compromise legislation backed by Democrats and the White House as well as the GOP proposal. If not, he promised a test-vote Friday morning to force a final up-or-down vote within days.

"We have danced this tune long enough," Reid declared
But many Republicans remained staunchly opposed to it, and some Democrats were ill or absent from the emergency, postelection congressional session. Supports of the bailout acknowledged that in this scenario, getting the requisite 60 votes to pass it would be very difficult.

"It's a challenge for us, but we're working as hard as we can and I would just say it's very close," said Sen. Debbie Stabenow, D-Mich.

Republicans are directly challenging Bush, arguing that any support for the domestic auto industry should carry significant, specific concessions from autoworkers and creditors. They're also bitterly opposed to tougher environmental rules carmakers would have to meet as part of the House-passed version of the rescue package — something that also faces some Democratic opposition.

Behind the scenes, Senate leaders were negotiating to schedule possible votes on the House-passed bill, a Senate version that omits the environmental provision, and the GOP alternative, sponsored by Sen. Bob Corker, R-Tenn.

The House approved its plan late Wednesday on a vote of 237-170. It would infuse money within days into cash-starved General Motors Corp. and Chrysler LLC. Ford Motor Co., which has said it has enough cash to make it through 2009, would also be eligible for federal aid.

Supporters cited dire warnings from GM and Chrysler executives, who have said they could run out of cash within weeks.

It's unclear how much support the measure enjoys among Senate Democrats, who have mostly been mum about it.