Democratic congressional leaders said Tuesday they were ready to push emergency legislation to aid the imperiled auto industry when lawmakers return to Washington next week for the first time after the election, setting the stage for one last showdown with President Bush.
WASHINGTON — Democratic congressional leaders said Tuesday they were ready to push emergency legislation to aid the imperiled auto industry when lawmakers return to Washington next week for the first time after the election, 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,” Senate Majority Leader Harry Reid, of Nevada, said in a statement.
His call for the session came soon after the House speaker, Nancy Pelosi of California, said Congress and the administration “must take immediate action” to stave off a possible collapse of the U.S. auto industry.
Pelosi stopped short of saying Congress would adopt legislation to provide emergency funds to the automakers, giving the Treasury Department the option of using money from the $700 billion bailout program instead.
Most Read Business Stories
- FAA safety engineer goes public to slam the agency's oversight of Boeing's 737 MAX
- MacKenzie Scott marries Seattle teacher after Bezos divorce
- 55,000 in Washington state may have to pay back thousands in jobless benefits
- Microsoft’s $10 billion Pentagon deal at risk amid Amazon fight
- 1 house, 45 offers: Homebuyers in Western Washington hard-pressed as supply remains scarce
But with the White House insisting the bailout money be reserved for financial institutions, that option seemed unlikely.
Congressional aides said that Democrats, should they move ahead with emergency legislation, would have to decide whether to push a stand-alone measure for the auto industry or include the aid in a wider economic-stimulus measure.
Such a package 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 projects — all programs the administration has resisted.
Reid and 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.
GM shares fell 13 percent Tuesday to $2.92, its lowest point since 1943. GM warned shareholders Monday it might not be able to continue as a “going concern.”
Ford shares fell 13 cents, or 6.7 percent, to $1.80.
At a meeting Monday at the White House, President-elect Barack Obama also urged Bush to help the auto companies. 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,” 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.”
Challenge to Bush
A senior Democratic official, who did not want to be identified, said Pelosi had decided to challenge Bush to work with the Democrats or veto aid to the teetering auto companies — and take the blame if one 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.
But he 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.
“That would be a better place to start,” Fratto said.
The automakers have called for at least $25 billion more in assistance. Industry experts say GM, Ford and Chrysler need quick access to unrestricted cash to help meet payroll and other basic obligations.
Don Stewart, a spokesman for Senate Minority Leader Mitch McConnell, said McConnell is reviewing Pelosi’s plan and had no immediate comment.
But Sen. Richard Shelby, R-Ala., the top Republican on the Senate Banking Committee, signaled his opposition: “The financial situation facing the Big Three is not a national problem, but their problem.”
Information from Bloomberg News is included in this report.