Pat Dollard | Young Americans

*** UPDATE:

Auto Bailout Bill Collapses in Senate Despite Intense Negotiations
Democratic leaders and the White House made final pleas for the bill’s passage on Thursday, but the two sides in the Senate failed to forge a compromise

(FOX)

A deal on $14 billion in aid to Detroit’s Big Three automakers fell apart Thursday night in the Senate despite intense negotiations on Capitol Hill between lawmakers, union officials and representatives from the three companies.

Earlier in the evening, the talks appeared to have produced a breakthrough, with Democratic leaders “hopeful” that an agreement had been reached that would be acceptable to Senate Republicans, who have resisted the aid package. But Senate Majority Leader Harry Reid came back later to report the effort had failed, adding he was “terribly disappointed.”

Republicans, after reviewing the latest version of the proposal in a closed-door meeting, balked at giving automaker federal aid unless their powerful union agreed to slash wages next year to bring them into line with those of Japanese carmakers.

Republican Sen. George V. Voinovich of Ohio, a strong bailout supporter, said the United Auto Workers was willing to make the cuts, but not until 2011.

The collapse of the latest negotiations came as the Wall Street Journal reported Thursday evening that General Motors had hired lawyers and bankers to consider whether to file for bankruptcy, a prospect made more likely by the outcome of Thursday’s talks.

A procedural vote is scheduled Thursday night but it is expected to be little more than a formality.

“We just don’t have the votes,” Reid said. “I dread looking at Wall Street in the morning.”

Democratic leaders and the White House made final pleas for the bill’s passage on Thursday, but the two sides in the Senate failed to forge a compromise.

The House approved the plan late Wednesday on a vote of 237-170. It would infuse money within days into cash-starved General Motors Corp. and Chrysler LLC. Ford Motor Co., which has said it has enough cash to make it through 2009, would also be eligible for federal aid.

The plan would also create a government “car czar,” to be named by President Bush to dole out loans, with the power to force the carmaker into bankruptcy next spring if they didn’t cut quick deals with labor unions, creditors and others to restructure their businesses and become viable.

But the legislation has met strong opposition from many Republicans — including Minority Leader Mitch McConnell — who claim it does not require enough accountability from auto makers. The Republicans planned to filibuster the legislation to prevent its passage in the U.S. Senate.

Key senators reach tentative auto bailout deal

WASHINGTON – A bipartisan group of senators reached tentative agreement Thursday night on an emergency $14 billion bailout for U.S. automakers, the Senate’s top Democrat said. Majority Leader Harry Reid said the lead Republican architect of the deal was briefing colleagues on the compromise, and Democrats were prepared to move forward on it quickly.

“We’re ready to go,” said Reid.

His announcement came after hours of marathon talks at the Capitol between labor, lawmakers and the auto industry to salvage the Big Three rescue. The talks centered on possible wage and benefit concessions from the United Auto Workers union as well as large-scale debt restructuring by General Motors Corp., Ford Motor Co. and Chrysler LLC.

The details of the agreement weren’t immediately known, and it was not clear whether Republicans senators — who revolted against an auto bailout the Bush White House negotiated with congressional Democrats — would go along.

Leaders stressed that the deal wasn’t final.

“All issues are still on the table,” said Sen. Dick Durbin of Illinois, the No. 2 Democrat, as he emerged from the talks.

But it was clear lawmakers had made substantial progress toward getting the auto industry aid back on track, and members of both parties were in search of an accord.

“We’ve got some issues still to resolve but we all want to resolve them,” said Sen. Bob Corker, R-Tenn., who led the closed-door talks for his party.

Sen. Chris Dodd, D-Conn., the Banking Committee chairman, who was his party’s point man, said staff aides were working on legislative language of a still-emerging deal.

“While we’ve reached some agreement on a lot already, there are issues that are still outstanding,” Dodd said.

Progress in the negotiations were the latest development in a long-running debate over bailing out the beleaguered auto industry. The issue gained urgency last week when the government reported the economy had lost more than a half-million jobs in November, the most in any month for more than 30 years.

“There’s a lot of hardship out there. People are losing their jobs, losing their homes, losing their cars and losing their patience,” said Reid, D-Nev. “We don’t need to pile on.”

It was unclear how far the participants were willing to go to seal the federal aid that General Motors and Chrysler said was essential to keep them from bankruptcy. Ford is in better financial shape than its rivals, although its survival is not assured, either.

The developments unfolded after Senate Republican leader Mitch McConnell of Kentucky joined other GOP lawmakers in announcing his opposition to a White House-backed rescue bill that was approved by the House a day earlier. He called for an alternative that would reduce the wages and benefits of U.S. autoworkers to bring them in line with those paid by Japanese carmakers Nissan, Toyota and Honda in the United States.

Sen. Bob Corker of Tennessee took a leading role in the closed-door talks for Republicans.

“The meetings have gone very well,” he said as he ducked out at one point. “We’ve got some issues to work out.”

When he re-entered the talks a short while later, industry representatives had departed, leaving only the UAW and lawmakers.

Sen. Chris Dodd of Connecticut, chairman of the Senate Banking Committee chairman, was the point man in the talks for Democrats, who count labor unions among their strongest political allies.

The negotiations marked the latest development in a long-running debate over bailing out the beleaguered auto industry. The issue gained urgency last week when the government reported the economy had lost more than a half-million jobs in November, the most in any month for more than 30 years.

The White House monitored the talks but was not directly participating. Administration officials had been deeply involved in recent days in drafting a compromise with House and Senate Democrats — the measure that McConnell and other Senate Republicans promptly repudiated.

Reid said at one point he hoped votes could be held by night’s end, but there was no timetable.

A growing number of Republicans and Democrats were turning against the House-passed bill — despite increasingly urgent expressions of support from the White House and President-elect Barack Obama for quick action to spare the economy the added pain of a potential automaker collapse.

The White House said Bush was calling Republican lawmakers, while Obama told reporters at a news conference in Chicago an industry shutdown would have a “devastating ripple effect” on the already ragged economy.”

The House-passed bill would create a Bush-appointed overseer to dole out the money. At the same time, carmakers would be compelled to return the aid if the “car czar” decided the carmakers hadn’t done enough to restructure by spring.

McConnell said that measure “isn’t nearly tough enough.”

Pushing to convert skeptics in both parties, Democrats agreed to drop at least one unrelated provision that threatened to sink the measure, a congressional official said. They were eliminating a pay raise for federal judges after Democratic Sen. Claire McCaskill of Missouri, who represents an automobile manufacturing state, announced she would oppose the carmaker aid unless that provision was removed.

Supporters had an uphill battle pressing the rescue package on a bailout-fatigued Congress — particularly a measure designed to span the administrations of a lame-duck president and his successor. Forced together by growing economic turmoil, the incoming and outgoing presidents were united in pressing hard for swift approval.

Earlier, just after the Labor Department reported new applications for jobless benefits were at their highest level in 26 years, White House Press Secretary Dana Perino said the country couldn’t afford an auto industry meltdown.

Before the late-day negotiations, patience had begun wearing thin at the Capitol as lawmakers looked ahead to adjourning for the holidays.

Reid at one point called for swift separate votes Thursday on compromise legislation backed by Democrats and the White House as well as the GOP proposal. If not, he promised a test vote Friday morning to force a final up-or-down decision within days.

“We have danced this tune long enough,” Reid declared.

But many Republicans remained staunchly opposed to the rescue, and some Democrats were ill or absent from the emergency, postelection congressional session. Supporters of the bailout acknowledged that in this scenario, getting the needed 60 votes to pass it would be very difficult.

Republicans were directly challenging Bush, arguing that any support for the domestic auto industry should carry significant, specific concessions from autoworkers and creditors. They are also bitterly opposed to tougher environmental rules carmakers would have to meet as part of the House-passed version of the rescue package — something that also faces some Democratic opposition.

A Senate version of the bill omits the environmental provision.

The House approved its plan late Wednesday on a vote of 237-170. Supporters cited dire warnings from GM and Chrysler executives, who have said they could run out of cash within weeks.

A pair of polls released Thursday indicated that the public is dubious about the rescue plan.

Just 39 percent said it would be right to spend billions in loans to keep GM, Ford and Chrysler in business, according to a poll by the nonpartisan Pew Research Center. Just 45 percent of Democrats and 31 percent of Republicans supported the idea.

In a separate Marist College poll, 48 percent said they oppose federal loans for the struggling automakers while 41 percent approved.

(AP)