The House of Representatives has approved legislation by a vote of 237 to 170 late Wednesday that would provide $14 billion in loans to troubled U.S. automakers. The fate of the measure in the Senate remains uncertain because of opposition from some Republicans there.
Under the deal reached with the Bush administration, the money drawn from funds Congress has already approved would be made available immediately to General Motors, Chrysler and Ford to help them avert collapse.
GM and Chrysler have told Congress they are most in need while Ford, although eligible for assistance, has said it has enough money to stay afloat for now.
March deadline set
By the end of March, the companies would have to submit additional detailed plans to achieve long term viability. Failure to do so, lawmakers have made clear, could result in the money spigot being turned off.
In House debate, supporters said Congress must prevent a critically-important part of the U.S. economy from collapsing.
Democrat Sander Levin, a Democrat from Michigan where the companies are based, spoke of the potential impact should any of them be allowed to fail.
"We're talking about people who work in the factories," said Levin. "We're talking about suppliers. If one of the Big Three goes down, the supplier network will be devastated and all those who sell automobiles and all those who are involved indirectly in the economy."
Some members of Congress favor reorganization
While saying no one wants to see auto companies fail, opponents said the measure amounts to another federal government bailout, with some suggesting reorganization under bankruptcy is preferable.
North Carolina Republican Virginia Foxx and fellow Republican Phil Gingrey of Georgia.
FOXX: "This is the wrong direction to go. We do not need to be bailing out the domestic auto manufacturers."
GINGREY: "Restructure under federal bankruptcy Chapter 11, lower those costs, re-negotiate those contracts, deal with the creditors to take less than 100 percent of the debt, and then if it doesn't work the automobile manufacturers can come back to Congress and ask for some additional help."
Representative Barney Frank, who heads the House Financial Services Committee, stressed that the measure was negotiated with President Bush.
"This is a bill that was brought forward in consultation with President Bush and his chief aides," said Frank.
Fate of measure uncertain in Senate
The fate of the legislation remained uncertain in the Senate, where a group of Republicans appeared to have sufficient votes as of Wednesday to block it.
Senator Richard Shelby of Alabama explained his opposition.
"Unless Chrysler, Ford and General Motors become lean and innovative and competitive in the marketplace, this is only delaying their funeral," Shelby said.
Bush will encourage Republican lawmakers to support plan
At the White House, Deputy Chief of Staff Joel Kaplan said President Bush would be in touch with Republican lawmakers to encourage them to support the plan.
"Look, there are a lot of people with concerns about this legislation," said Joel Kaplan. "We have had concerns about the legislation, and we wanted to make sure that it was tough and that this was not a bridge financing to nowhere."
If approved by Congress, the legislation would empower a presidentially-appointed official to assess progress, approve auto company expenditures and if necessary, force any of them into bankruptcy-based restructuring.
Senate Republican leader Mitch McConnell declined to speculate when a House-passed measure might come up there, or what alternative proposals might make it to the Senate floor for a vote.
House Majority Leader Steny Hoyer told reporters House members have been advised to be available at least through Thursday or Friday to deal with any legislative requirements.