Democrats Seek Help for Carmakers
WASHINGTON — Democratic Congressional leaders said Tuesday that they were ready to push emergency legislation to aid the imperiled auto industry when lawmakers return to Washington next week, setting the stage for one last showdown with President Bush.
“Next week, during the lame-duck session of Congress, we are determined to pass legislation that will save the jobs of millions of workers whose livelihoods are on the line,” the majority leader, Harry Reid of Nevada, said in a statement.
His call for the session, the first since the election, came shortly after the House speaker, Nancy Pelosi, said Congress and the administration “must take immediate action” to stave off a possible collapse of the American auto industry.
Ms. Pelosi stopped short of saying Congress would adopt legislation to provide emergency financial aid to the automakers, giving the Treasury Department the option of using money from the $700 billion bailout program instead.
But with the White House insisting that the bailout money be reserved for financial institutions, that option seemed unlikely, leading a senior Democratic official to say Democrats would try to force Mr. Bush’s hand.
Congressional aides said that Democrats, should they move ahead with emergency legislation, would have to decide whether to put forward a stand-alone measure for the auto industry or include the aid in a wider economic stimulus measure. Such a package as the latter is likely to include extended unemployment benefits, aid to strapped states and cities, new money for health care and food stamps and possibly money for public works — all programs Mr. Bush has resisted.
Mr. Reid and Ms. Pelosi have urged the Bush administration to help the major automakers, especially General Motors, which is fast depleting its cash reserves and seems to be hurtling toward bankruptcy. G.M. shares, pummeled for weeks, fell an additional 13 percent on Tuesday to $2.92, its lowest point since 1943. G.M. on Monday warned shareholders that it might not be able to continue as a “going concern.”
At a meeting on Monday at the White House, President-elect Barack Obama also urged Mr. Bush to help the automobile companies, and Congressional aides said Democratic leaders were coordinating their activities with his transition team.
“In order to prevent the failure of one or more of the major American automobile manufacturers,” Ms. Pelosi said in her statement, “which would have a devastating impact on our economy, particularly on the men and women who work in that industry, Congress and the Bush administration must take immediate action.”
She added, “I am confident Congress can consider emergency assistance legislation next week during a lame-duck session, and I hope the Bush administration would support it.”
A senior Democratic official, who did not want to be identified talking publicly about party strategy, said Ms. Pelosi had decided to challenge Mr. Bush to work with the Democrats or veto aid to the teetering auto companies — and take the blame if one of them fails.
The White House has resisted calls by Congress to use the $700 billion to help the automakers, saying that money is better spent easing the credit crunch at the heart of the economic crisis.
Tony Fratto, the deputy White House press secretary, said it was not clear what the Democrats were proposing to do. But Mr. Fratto said Congress might better focus its efforts by easing restrictions on $25 billion in plant-retooling loans for the automobile industry that were approved in September.
The automakers have called for at least $25 billion more in assistance, and industry experts say G.M., Ford and Chrysler need quick access to unrestricted cash to help meet payroll and other basic obligations.
Mr. Bush, at his meeting with Mr. Obama on Monday, reiterated his longstanding desire to a reach a free-trade agreement with Colombia, which Mr. Obama and other Democrats have opposed. Some officials suggested Mr. Bush would back aid for the automakers in exchange for Democratic support on the free-trade deal, a notion that the White House dismissed.
A standalone bill would have the best chance of winning passage in Congress, where Republicans for the moment still retain a powerful minority in the Senate, and the best chance of winning Mr. Bush’s signature.
But many Democrats, and many leading economists, have said there is a need for a broader stimulus, and Democrats have been working on a package that would include an increase of unemployment benefits, new infrastructure spending, financial assistance for states struggling with increased Medicaid costs and increased food stamps.
Whichever path they choose, Democrats could be headed for a confrontation with Mr. Bush and were setting the stage for a dramatic lame-duck session, including a potential reunion on Capitol Hill of Mr. Obama, Vice President-elect Joseph R. Biden Jr. and the defeated Republican nominee, Senator John McCain of Arizona.
Mr. Obama does not intend to play a leading role in the session. Aides said he was focused on the economic packages he would offer as president, as well as working behind the scenes with Congressional Democratic leaders. But aides have not definitively ruled out the prospect of Mr. Obama casting his vote if it was needed. His Senate replacement will not be named by then.
The Senate had long planned to come back into session next week to deal with a public lands bill, and both the Senate and the House had planned to begin organizing for the next Congress.
But it was not certain that the House would convene for a formal post-election session, in which dozens of retiring and defeated lawmakers will be called back to work. House Democrats have said they are not inclined to spend time considering a stimulus package if it was only going to be vetoed by Mr. Bush.
With the auto companies reeling and Mr. Bush sending no signal that he would act, Ms. Pelosi said she had asked Representative Barney Frank, Democrat of Massachusetts and chairman of the Financial Services Committee, to begin drafting legislation directing that part of the $700 billion bailout be used to help the automakers.
“Emergency assistance to the automobile industry would be conditioned on executive compensation restrictions, a prohibition on golden parachutes, rigorous independent oversight and other taxpayer protections to ensure that any companies that benefit from this assistance and not the taxpayers bear the full burden of repaying any costs that are incurred,” Ms. Pelosi said in her statement.
Ms. Pelosi’s position drew quick support from Representative John D. Dingell, Democrat of Michigan and a top ally of the auto industry, who said he was working with other Michigan lawmakers on a measure to help the industry “re-emerge as a global, competitive leader in fuel efficiency and in new, path-breaking, energy-efficient technologies that protect our environment.”
General Motors, and to a lesser extent, Ford, were also mobilizing their car dealers and suppliers across the country to exert pressure on the White House and Congressional Republicans to support federal relief, according to industry sources.
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