Senate to take up auto bailout bill on Monday

WASHINGTON - Struggling to keep alive a government bailout of the troubled auto industry, key supporters offered concessions Friday — including reducing its $25 billion size. The White House came out firmly against a Democratic plan to carve it out of a $700 billion rescue package for financial companies.

The measure gained important ground among Republicans on Capitol Hill, where at least a dozen to 15 GOP votes in the Senate will be needed to prevent opponents from blocking it in the Senate. The focal vote on that could occur as early as next Wednesday.

Sen. Kit Bond of Missouri became the second Republican to publicly voice support for the idea, joining Sen. George Voinovich of Ohio. Both states have major auto plants. Several other GOP senators signaled they might accept a rescue for Detroit’s Big Three if it contained strict conditions for the beleaguered companies, including management and salary changes, concessions from their powerful unions, and a commitment to making more fuel-efficient vehicles.

Alan Reuther, the United Auto Workers union’s legislative director, said one option under consideration was a smaller, more targeted amount of funding “that would get the companies through to March.” He said the union was “open to discussing various options like that. There’s a need for immediate action.”

Sen. Debbie Stabenow, D-Mich., said negotiations were taking place on how much to trim the package. “We’re still at this point talking to colleagues to see what the support is there for,” she said. “This is about getting enough votes to be able to solve the problem.”

General Motors Corp., Ford Motor Co., and Chrysler LLC have been clamoring for such aid as their industry is battered by the economic meltdown, which has choked off sales and frozen credit. GM has said it might not survive through year’s end without a government lifeline.

The White House’s rejection of using any of the $700 billion designated for the financial meltdown sets up what could be the last showdown between President George W. Bush and the Democratic Congress. “Democrats are choosing a path that would only lead to partisan gridlock,” White House press secretary Dana Perino told The Associated Press.

Perino said the administration would rather Congress speed the release of a separate $25 billion loan package for the carmakers, which was approved in September to help them meet tougher fuel-efficiency rules. Environmentalists and House Speaker Nancy Pelosi have vehemently opposed using that money for anything other than designing and building vehicles that get higher gas mileage and produce less pollution.

Defying Bush, Reid, D-Nev., said he would hold a vote next week on the measure, attaching the auto help to a $6 billion bill to extend jobless aid to unemployed workers whose benefits are expiring.

Behind the scenes, proponents scrounged for more support among Republicans from states with heavy concentrations of auto manufacturers and suppliers, and worked to allay concerns among lawmakers in both parties about supporting yet another bailout so soon after the unpopular financial industry rescue.

A handful of other GOP senators have said they are open to the measure.

Sen. Charles E. Grassley, R-Iowa, said in a letter to Reid and Pelosi that any bailout should “include restrictions on executive salaries, compensation packages, and excessive internal spending,” along with commitments from the carmakers to develop more fuel-efficient vehicles.

Sens. Richard Lugar, R-Ind., said through a spokesman that he would review the proposal, noting that he had backed a similar program for Chrysler in 1979 only with taxpayer protections and “serious concessions from the company, its dealers and the United Auto Workers.”

Sen. Arlen Specter, R-Pa., told The Morning Call of Allentown, Pa., that he was “prepared to consider it,” but wanted answers on “whether the situation is so precarious that it would take more than what is proposed” to save the auto companies.

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