Facing enormous job losses, the White House and congressional Democrats were negotiating a deal Saturday to provide about $15 billion in loans to prevent Detroit's weakened auto industry from collapsing.
The White House said it was in "constructive discussions" with lawmakers in both parties to dole out the assistance as aides worked through the weekend drafting bailout legislation that is expected to come to a vote this week.
Still, Capitol Hill leaders face a skeptical Congress. 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 actually can survive.
A breakthrough on the bailout came Friday when House Speaker Nancy Pelosi, D-Calif., yielded to President Bush on a key point: allowing the aid to be drawn from a $25 billion fund set aside for the production of environmentally friendlier cars.
The legislation being developed would throw a lifeline to General Motors Corp., Ford Motor Co. and Chrysler LLC while meeting demands from skeptical lawmakers that Congress not write a blank check for the beleaguered industry.
With time running out on the current Congress and the automakers' situation increasingly dire, the window for an agreement was quickly closing.
Top executives from the Detroit automakers spent two consecutive days last week on Capitol Hill pleading for $34 billion in loans to help the industry survive. GM and Chrysler said they needed a combined $15 billion to help them maintain their operations through early 2009. Ford wants access to a line of credit of up to $9 billion but only if market conditions deteriorate.
The carmakers employ almost 250,000 workers, and more than 730,000 others produce materials and parts for cars. If one of the automakers should declare bankruptcy, some estimates put U.S. job losses next year as high as 2.5 million.
