Auto Bailout Plan Is Sent To The White House

(CBS/AP) Congressional Democrats on Monday sent the White House a draft of a roughly $15 billion auto bailout they aim to bring to a vote this week, but White House officials gave a cool initial response.

According to a draft obtained by The Associated Press, the measure would rush bridge loans to Detroit's struggling Big Three and put an overseer chosen by President Bush in charge of monitoring an auto industry restructuring.

The White House had just begun evaluating the Democratic language, according to officials who would comment on the continuing negotiations only on condition of anonymity. But they said the draft didn't appear consistent with the principles behind a broad agreement to give long-term financing only to viable companies. They said it was hard to tell definitively whether their doubts were warranted and they would continue talking to Capitol Hill representatives.

The proposed overseer could recall the loans as early as February if the carmakers were not doing enough to reinvent themselves and become viable. And if the Big Three did not come up with suitable restructuring plans by the end of March, the "car czar" would have to submit his own blueprint to Congress for a government-mandated overhaul.

Earlier on Monday, Congressional officials said Kenneth Feinberg, the lawyer who oversaw the federal Sept. 11 victims' compensation fund, is under consideration for the post.

"It sounds like we have agreement on those basic principles that would be required for a bill that the president could sign," White House press secretary Dana Perino told reporters.

Asked if a deal could be struck for a vote as early as Monday, Perino said, "I think it's very likely." She prodded senior Democratic lawmakers to send their proposal, particularly if they expected initial votes within 24 hours. "It seems pretty soon if we haven't seen the language yet," she said.

The rescue package may be most important for General Motors, which is reportedly in danger of imminent collapse without an emergency loan. During an appearance Monday on CBS' The Early Show, Michigan Gov. Jennifer Granholm said that "if General Motors doesn't get this loan by the end of this month, it is 'game over.'"

Rep. Barney Frank, D-Mass., the Financial Services Committee chairman, said that he, too, expected a deal by the end of the day on a proposal that would draw emergency aid from an existing loan program meant to help the automakers build fuel-efficient vehicles. House and Senate Democratic aides were finalizing the package, which was expected to provide between $14 billion and $17 billion.

"There should be agreement by the end of today," Frank said on CNBC. He said he expected the bailout would clear Congress and be signed by Bush "before the week (is) out."

Some issues remain, however.

Several lawmakers are eager to force the automakers to bring in new top executives as a condition of federal aid. Sen. Charles Schumer, D-N.Y., wants a requirement in the bailout bill to separate the jobs of chairman and chief executive officer, which would strip GM's Rick Wagoner and Chrysler's Bob Nardelli of some power and bring in new people to transform the companies. Ford already splits the two positions, between CEO Alan Mulally and Executive Chairman Bill Ford Jr.

Chris Dodd, D-Conn., chairman of the Senate Banking Committee, said Sunday that Wagoner "has to move on" as part of a government-run restructuring.

"I think you have got to consider new leadership," Dodd said on CBS' "Face the Nation."

In return for the rescue money, the carmakers would have to agree to terms similar to those placed on banks that receive funds under the $700 billion Wall Street bailout: to limit their top executives' pay packages, cease paying dividends, give the government a chunk of future gains and guarantee that taxpayers would be reimbursed before any other shareholders, congressional aides said.

Some lawmakers still want to create a Cabinet-level oversight board to help run the bailout, although the proposal appeared to be losing traction, with the White House pushing for a single adviser who could send the companies into bankruptcy if the companies don't make progress on fundamental shifts.

Criticized for staying on the sidelines until now, Obama voiced support Sunday for the bailout legislation being drafted in Congress. He accused car industry executives of a persistent "head-in-the-sand approach" to long-festering problems.

© MMVIII, CBS Interactive Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.

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  • by CITIZEN Location: LEXINGTON on Dec 9, 2008 at 12:57 PM
    If the government is going to bail out the BIG 3, they need to put a clause in there no more work can be shipped overseas all work has to be performed by legal American citizens. The Bush Admministration needs to give the American people money also. He needs to do another stimulus package before he leaves office. I knonw he will not because he does not have a heart and could care less because he is already rich.
  • by KELLY on Dec 8, 2008 at 02:31 PM
    Let them go, that's why we buy toyota.


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