Senate To Debate Saving Auto Industry Next Week

Bill to rescue the troubled U.S. auto industry with $25 billion in emergency loans inched forward when the Senate said it will begin debate Monday and hold a test vote two days later.

WASHINGTON (AP) -- A bill to rescue the troubled auto industry with $25 billion in emergency loans inched forward Friday when Majority Leader Harry Reid said the Senate will begin debate Monday and hold a test vote two days later. Supporters scrambled for votes to break an expected filibuster.

They expect to need 12 to 15 GOP votes to attach the measure to a $6 billion bill the House passed in October that would extend jobless benefits. So far, however, they had only one firm commitment, from Sen. George Voinovich of Ohio, a state with several auto plants and manufacturers of auto supplies.

"Right now, I don't think there are the votes" for the auto rescue, Sen. Chris Dodd, D-Conn., chairman of the Senate Banking, Housing and Urban Affairs Committee, said Thursday.

But Sen. Carl M. Levin, D-Mich., an architect of the carmaker aid, said he was "confident that there will be bipartisan support for legislation to support the U.S. auto industry."

Reid, D-Nev., rejected Dodd's suggestion to wait until next year when Democrats will have bigger majorities in the House and Senate as well as Barack Obama in the White House.

In a letter Friday to Sen. Mitch McConnell, R-Ky., the minority leader, Reid made a plea for the GOP to allow votes on the package next week.

McConnell has not taken a public position on the plan. He has called instead for a measure that would speed release of a separate $25 billion loan package for the carmakers, which was approved in September to help them develop fuel-efficient vehicles.

The White House backs that idea.

"We're seeing if they would be willing to accelerate loans for viable companies," Dana Perino, the White House press secretary, said of congressional Democrats.

In fact, Democrats are reluctant to do that, because it would mean removing restrictions on the money backed by environmental and consumer groups. Environmental groups, a key Democratic constituency, insist that any aid for the auto industry be tied to stricter clean-air rules and better fuel economy for their products.

Removing those limits from the $25 billion loan package approved in September "would be a huge bait and switch," said Ann Mesnikoff, director of the clean cars campaign at the Sierra Club.

The Democrats' new carmaker aid plan would carve out part of the $700 billion Wall Street bailout for loans to the three major U.S. auto companies. The measure would provide for the government to hold some kind of ownership stake in the companies for the duration of the loan to ensure that taxpayers shared in any gain and would ultimately be reimbursed.

Citing an economic downturn that has choked off sales and frozen credit, General Motors Corp., Ford Motor Co. and Chrysler LLC are lobbying feverishly for Congress to approve the aid,

With feelings still raw from the election and the public dismayed by the Wall Street rescue, the auto proposal remains a tough sell. Some Senate Republicans are skeptical the aid would lead to changes by the companies that could make them viable in the long run. But several states with Republican senators have Detroit Three auto factories.

"Spending billions of additional federal tax dollars with no promises to reform the root causes crippling automakers' competitiveness around the world is neither fair to taxpayers nor sound fiscal policy," House Republican Leader John Boehner of Ohio, said in announcing his opposition to the measure.

Supporters of the auto bailout are targeting lawmakers who represent states with auto plants and auto suppliers, as well as Republicans in states with high unemployment rates. McConnell's state is home to Ford and GM plants.

Sen. Kit Bond of Missouri, R-Mo., left open the possibility that he could be persuaded to back a carmaker rescue. "While I have real concerns with another taxpayer funded bailout, there are also thousands of workers in Missouri whose jobs are on the line so the devil will be in the details," Bond said in a statement.

Democrats would have no problem passing the bill in the House, where they have a much larger majority than the narrow 50-49 one they will have in the Senate once President-elect Barack Obama resigns on Monday. But Speaker Nancy Pelosi, D-Calif., has been reluctant to convene a formal session until she is sure the measure will pass the Senate.

Lawmakers in both houses will be in Washington next week to reorganize their leadership teams and committee assignments for the 111th Congress that will convene on Jan. 3.

The bill Democrats are writing would insert the government squarely into the car companies' operations. It would require that the companies submit a plan for long-term viability in exchange for the loans, share a portion of future profits with the government and reimburse taxpayers before any other shareholder, according to aides familiar with it.

"We certainly want to make sure that there's a plan how are you going to get out of this mess," said Sen. Charles E. Schumer, D-N.Y.

The car companies also would face tougher restrictions on pay for their executives and dividends for their shareholders than did the financial companies that got a piece of the original bailout.

Associated Press writers Andrew Taylor, Ken Thomas and Sam Hananel contributed to this report.