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9:55 AM
Reporting from Washington -- The White House said this morning it had finalized a deal with congressional Democrats to provide $14 billion in emergency loans to U.S. automakers with strict oversight that would require restructuring plans or bankruptcy by the spring.
"It's a bill that provides bridge financing to one of two possibilities . . . fundamental restructuring or bankruptcy," said Joel Kaplan, White House deputy chief of staff for policy. "We wanted to make sure it was tough and that this was not a bridge financing to nowhere."
The legislation, which House Democrats finished drafting this morning, would create a presidentially appointed monitor, or auto czar, to negotiate the restructuring of any companies that take the money. General Motors and Chrysler both have said they need government money to survive until March 31.
If those restructuring agreements don't meet strict terms for future financial viability by March 31 -- or by April 30 if the monitor agrees to a one-time extension to complete productive talks -- the government would be required to recall the loan, Kaplan said. That move would trigger bankruptcy for any company that was desperate enough to need the emergency loans, he said.
The legislation would prohibit any additional federal money to the automakers if they fail to come up with an acceptable restructuring plan, but would open the door to longer-term government financing if they do.
"This gives these firms a chance to make these concessions voluntarily, but if they don't, the alternative path is quite clear," Kaplan said.
The final sticking point was overcome when congressional Democrats removed a controversial provision to require automakers to stop funding lawsuits against California and more than a dozen other states over new limits on greenhouse gas emissions. Kaplan said the White House had told Democratic leaders there was no chance the bill would pass if that provision remained.
The legislation faces a tough road in the Senate, where Democrats hold a slim 50-49 majority and need Republican support to get the 60 votes needed to avoid a threatened filibuster. This morning, Sen. David Vitter (R-La.) vowed to use whatever procedural tactics he could to block the bill.
"This proposal at its core is about giving these companies $15 billion of loans ... on the promise of a detailed restructuring plan yet to come," Vitter said. "I think the average American would say, 'What? Isn't that putting the cart before the horse? Isn't that, to use a common phrase, just ass-backwards?'
Because of such opposition, Senate Minority Leader Mitch McConnell (R-Kentucky) said he would not allow a vote to take place today, as Democrats and the White House had hoped. The White House was dispatching Chief of Staff Josh Bolten to Capitol Hill today to try to convince skeptical Senate Republicans, and President Bush was expected to personally lobby in coming days, Kaplan said.
"It's a bill that provides bridge financing to one of two possibilities . . . fundamental restructuring or bankruptcy," said Joel Kaplan, White House deputy chief of staff for policy. "We wanted to make sure it was tough and that this was not a bridge financing to nowhere."
The legislation, which House Democrats finished drafting this morning, would create a presidentially appointed monitor, or auto czar, to negotiate the restructuring of any companies that take the money. General Motors and Chrysler both have said they need government money to survive until March 31.
If those restructuring agreements don't meet strict terms for future financial viability by March 31 -- or by April 30 if the monitor agrees to a one-time extension to complete productive talks -- the government would be required to recall the loan, Kaplan said. That move would trigger bankruptcy for any company that was desperate enough to need the emergency loans, he said.
The legislation would prohibit any additional federal money to the automakers if they fail to come up with an acceptable restructuring plan, but would open the door to longer-term government financing if they do.
"This gives these firms a chance to make these concessions voluntarily, but if they don't, the alternative path is quite clear," Kaplan said.
The final sticking point was overcome when congressional Democrats removed a controversial provision to require automakers to stop funding lawsuits against California and more than a dozen other states over new limits on greenhouse gas emissions. Kaplan said the White House had told Democratic leaders there was no chance the bill would pass if that provision remained.
The legislation faces a tough road in the Senate, where Democrats hold a slim 50-49 majority and need Republican support to get the 60 votes needed to avoid a threatened filibuster. This morning, Sen. David Vitter (R-La.) vowed to use whatever procedural tactics he could to block the bill.
"This proposal at its core is about giving these companies $15 billion of loans ... on the promise of a detailed restructuring plan yet to come," Vitter said. "I think the average American would say, 'What? Isn't that putting the cart before the horse? Isn't that, to use a common phrase, just ass-backwards?'
Because of such opposition, Senate Minority Leader Mitch McConnell (R-Kentucky) said he would not allow a vote to take place today, as Democrats and the White House had hoped. The White House was dispatching Chief of Staff Josh Bolten to Capitol Hill today to try to convince skeptical Senate Republicans, and President Bush was expected to personally lobby in coming days, Kaplan said.
