WASHINGTON â€” Faced with staggering new unemployment figures, Democratic Congressional leaders said on Friday that they were ready to provide a short-term rescue plan for American automakers, and that they expected to hold a vote on the legislation in a special session next week.
Seeking to end a weeks-long stalemate between the Bush administration and House Speaker Nancy Pelosi, senior Congressional aides said that the money would most likely come from $25 billion in federally subsidized loans intended for developing fuel-efficient cars.
By breaking that impasse, the lawmakers could also clear the way for the Treasury secretary, Henry M. Paulson Jr., to request the remaining $350 billion of the financial industry bailout fund knowing he will not get bogged down in a fight over aiding Detroit.
One additional thing to keep in mind is the compromise reached here. Because that the money will be coming from funds already set aside with the passage of the 2007 energy bill. And it will help these companies accomplish the same thing that money was intended to do in the first place…develop more energy efficient cars.
Yes, reorganization will happen in the meantime, and yes, they may need additional money to help them with that, but that road is preferable than a protracted bankruptcy that would shatter consumer confidence in their brands.
More as it develops…