No Bailout Deal for Automakers

WASHINGTON (RushPRNews)12/12/08-Majority Democrats and minority Republicans in the U.S. Senate have failed to reach agreement on a financial rescue plan for the nation’s struggling auto industry. Senate Majority Leader Harry Reid announced late Thursday night that lawmakers could not get a final deal “over the finish line,” saying there were too many differences between Democrats and Republicans. Reid called the failure “a great loss for the country.”

Republican lawmakers say the talks failed because the union that represents employees, the United Auto Workers, refused to agree to a date to slash wages.

Tennessee Republican Bob Corker says the Senate is just three words away from passing the deal – “a date certain.”

Shortly after Reid announced the talks had failed, the Senate held a procedural vote that effectively killed the legislation. The vote was 52 to 35, falling short of the 60 votes necessary to move the bill forward..

The package would have provided $14 billion in loans or lines of credit to the so-called “Big Three” automakers – General Motors, Ford and Chrysler.

It would also create a federal government post of “car czar” to oversee the industry.

The bill passed the U.S. House of Representatives on Wednesday, after long negotiations between the White House and Democratic lawmakers. Republicans wanted the “Big Three” to show a commitment to bring down labor costs and become competitive with their non-U.S. peers.

Both President George Bush and President-elect Barack Obama pleaded with lawmakers to approve the measure.

White House spokeswoman Dana Perino warns that the battered U.S. economy cannot sustain failure by one of the Big Three car companies, which could result in the loss of one-million jobs.

Mr. Obama said we can not let this key industry collapse because of the “ripple effect” it would have on the rest of the U.S. economy.

Earlier Thursday, the Labor Department said first-time claims for unemployment benefits jumped by 58,000 to 573,000, to a 26-year high. Another government report said falling demand cut U.S. exports by two percent in October.