Senator May Seek Additional Loans For Automakers

Michigan Sen. Carl Levin said Thursday he may seek an additional $25 billion in loans before the end of the year, citing deteriorating economic conditions for Detroit's car makers.

WASHINGTON (AP) -- Sen. Carl Levin said Thursday he may seek an additional $25 billion in loans for the auto industry before the end of the year, citing deteriorating economic conditions for Detroit's car makers.

Levin, D-Mich., said doubling the loan program to $50 billion would help automakers during a difficult period for the industry. Congress approved a $25 billion loan program last month, but credit markets have tightened since then and the companies have reported dismal sales figures.

"I think we ought to make sure that we take every step we can to assist the industry through this rough patch," Levin said in an interview with The Associated Press.

Levin said he was "exploring" the possibility of seeking the additional funding in an economic stimulus plan Congress may consider after the November elections. Democrats have said they may consider a postelection stimulus plan that could cost as much as $150 billion.

The Michigan senator said he discussed the additional funding with Senate Majority Leader Harry Reid, D-Nev., on Thursday. Levin said Reid was "open to it."

Reid spokesman Jim Manley said that while the size and scope of the recovery package will be under discussion by lawmakers, "this is something that Senator Reid is willing to take a look at."

Automakers initially sought $50 billion in loans earlier this year but scaled back their proposal to $25 billion. Levin noted that Democratic presidential nominee Barack Obama has proposed doubling the $25 billion loan program, which could help if Obama wins the White House.

Congress last month approved funding for a $25 billion loan program to help the industry retool factories and develop technology to meet new government fuel-efficiency standards of at least 35 miles per gallon by 2020, a 40 percent increase.

Michigan lawmakers have urged the Energy Department to speed up the process to allow the low-cost loans to start flowing to U.S. automakers. Energy officials have said it may not be available until mid-2009 or later.

Since the loans were approved, Congress has approved a $700 billion bailout of the financial sector followed by several roller-coaster sessions on Wall Street and concerns about the availability of credit.

Ford Motor Co., Toyota Motor Corp., Chrysler LLC and Nissan Motor Co. all reported U.S. sales drops of more than 30 percent in September and General Motors Corp. said sales were down 16 percent. GM said Thursday it would lay off 1,600 workers at three factories indefinitely over the next few months.

Ford spokesman Mike Moran said "we appreciate the support of our plans to bring more fuel efficient vehicles to market. Access to capital is extremely important to continuing those plans."

Levin said many "unknowns" remain and it was still unclear if Congress would consider a stimulus package before the end of the year.

House Speaker Nancy Pelosi has said it would be larger than a $61 billion plan that passed the House last month but died in the Senate. She has said it may include extending jobless benefits, spending federal funding on infrastructure projects like roads and bridges and aid to states for their Medicaid bills.

Democrats could call Congress into a lame-duck session after the elections to work on a stimulus bill, months ahead of the January start of the new Congress.

Levin said seeking the additional funding for the industry was "a logical thing given the economic state of this country."

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