Time running out for auto deal

The developing plan is designed to keep the companies operating through March.

WASHINGTON (AP) — Racing to seal a deal with the White House, Democratic congressional leaders dispatched aides Saturday to draft an emergency $15 billion aid package to pull Detroit’s Big Three automakers from the brink of collapse.

Capitol Hill leaders prepared to sell yet another bailout to a skeptical Congress. It is an uphill battle: The anger is fresh over how the Bush administration used the $700 billion Wall Street rescue fund, and lawmakers are questioning whether the once-mighty auto giants can survive.

Still, with Washington spooked by massive job losses that provided the latest evidence of a deepening recession, the White House said it was in “constructive discussions” with lawmakers in both parties on the assistance. House and Senate Democratic staff aides worked through the weekend to hammer out details, with votes on the plan expected in the week ahead.

The emerging measure would speed short-term help to General Motors Corp., Ford Motor Co. and Chrysler LLC, while empowering the government to order a wholesale restructuring of the industry and imposing tight restrictions on the Big Three, according to congressional officials and others close to the talks. They described the developing plan on condition of anonymity because the details were not final.

It is designed to tide over the companies — particularly GM and Chrysler, which have warned that they are just weeks from going bust — through March, when Barack Obama is president and a new Congress could consider a longer-term solution.

A breakthrough on the long-stalled rescue came Friday when House Speaker Nancy Pelosi, D-Calif, yielded to President George W. Bush on a key point: allowing the aid to come from an existing fund set aside for the production of environmentally friendlier cars.

White House press secretary Dana Perino said that was central to any agreement, along with requirements that the carmakers swallow tough business decisions and taxpayers be protected.

“Taxpayers should not be asked to finance assistance for automakers without a strong likelihood that they will be paid back,” Perino said in a statement Saturday.

Pelosi said the House would consider legislation in the upcoming week that would include rigorous oversight and strong taxpayer protections. Senate Majority Leader Harry Reid, D-Nev., said he aimed for votes on “a responsible plan to help the millions of Americans who rely on a healthy auto industry for their livelihoods. “

“We will need support and cooperation from Republicans to determine when that vote happens and whether it will succeed,” Reid said in a statement.

But no Republicans were participating in the weekend negotiating sessions, led by aides to Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee, and Sen. Chris Dodd, D-Conn., chairman of the Senate Banking, Housing and Urban Affairs Committee.

Sen. Mitch McConnell, R-Ky., the minority leader, said he looked forward to seeing the bill. “As we consider this legislation, our first priority must be to protect the hard-earned money of the American taxpayer,” McConnell said in a statement.

The emerging plan remained a tough sell. Sen. Bob Corker, R-Tenn., said Saturday he was “disappointed” with the still-unwritten rescue because it did not require major union givebacks or debt restructuring moves.

“Before we even contemplate making a loan to these companies, we need to put in place specific and rigorous measures,” Corker said in a statement.

Auto-state lawmakers were cautiously optimistic.

“There’s still a long ways to go. We’re working all weekend here,” said Sen. Carl Levin, D-Mich. He said there was a “good chance” Congress would act in the coming week — “but far from certain” given that the legislation has been neither written nor reviewed by lawmakers.