White House Reviews Draft US Auto Deal

WASHINGTON (RushPRnews)12/09/08-The White House is reviewing a draft agreement submitted by Democratic Party lawmakers who say it could help the ailing U.S. auto industry survive the next few months and rescue millions of jobs.

U.S. President George Bush, in an interview late Monday with ABC-TV News, declined to say whether a deal is close. Mr. Bush said only companies that can survive in the long-term should be eligible for bailout funds. He said policy makers must do their best to guarantee that taxpayer money is repaid.

Earlier Monday, the Bush administration and Democrats in Congress said they were making progress in reaching a deal on a draft proposal that would make automakers eligible for $15 billion in emergency loans. The funds would come from an existing Department of Energy program to improve vehicle fuel-efficiency.

The proposed bailout would place restrictions on companies receiving the loans and would allow the president to create an oversight board or official (“car czar”) to monitor restructuring.

Taxpayers would receive stock guarantees equal to 20 percent of the loan amount, and companies would be required to eliminate corporate jets and dividends. The draft bill also sets a March 31 deadline for companies to submit detailed, long-term restructuring plans.

Two of the major U.S. automakers – Chrysler and General Motors – say they need billions of dollars to avoid collapse, while Ford says it may be able to survive as long as one of the others does not fail. Democratic Representative Barney Frank says President Bush indicated he would veto a bailout costing more than 15 billion dollars, although companies had asked for more than twice that amount.

Members of the United Auto Workers gathered in Washington on Monday to urge that Congress and Mr. Bush pass a bailout bill. They also rebutted claims from critics who blame unions for causing auto companies’ financial difficulties. The workers instead blamed the Wall Street financial crisis.

Some information for this report was provided by AFP, AP and Reuters