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Senate Republicans Vow to Block Aid to US Automakers

Congressional Democrats say they have reached agreement with the White House on a deal to give U.S. automakers billions of dollars in loans and require the companies to restructure to stay competitive in the global marketplace. Although the deal has wide support in the House of Representatives, but its fate remains unclear in the Senate, where Republicans say the measure does not go far enough to force the industry to reform.

The proposal would make $14 billion in loans immediately available to General Motors, Chrysler, and Ford to help shore up the beleaguered automakers through March. The loans would come from already-appropriated money.

In return, by the end of March the companies would have to submit a restructuring plan to achieve long-term viability and international competitiveness.

Some Senate Republicans were quick to express their opposition to the plan. They argue that giving automakers money first and then demanding that they restructure is the wrong approach.

Senator Richard Shelby of Alabama is among several Republicans who are vowing to block the bill from advancing in the Senate.

"Unless Chrysler, Ford and General Motors become lean and innovative and competitive in the marketplace, this is only delaying their funeral," he said.

But Democratic Senator Debbie Stabenow of Michigan, the state where the automakers are based, warns that if one or more of the companies go bankrupt, millions of jobs would be lost - further harming a U.S. economy, which is already in recession.

"This is more than just penalizing a company that you are mad at. This is about the underpinnings of our economy, and fundamentally whether we are going to compete with every other country and make things in an advanced, manufacturing economy," said Stabenov.

At the White House, Deputy Chief of Staff Joel Kaplan says President Bush would be in touch with individual Republican lawmakers to win their support for the plan.

"We wanted to make sure that it was tough and that this was not a bridge financing to nowhere, that we could look these members in the eye, and we could look the American people in the eye and say that this measure gives these companies a chance and their stakeholders a chance, but its not a lifeline to continue with bad management and a bad business plan," said Kaplan.

The plan also calls for the president to appoint a so-called "car czar", someone to oversee the loans and monitor the companies' progress toward reforming.