Auto Deal Appears Near
The Democrats finally gave ground on the source of funds (using a good chunk of the $25 billion pledge to the Big 3 for efficiency upgrades, rather than using part of the $700 billion intending for financial firms in the TARP), and we probably have a deal coming next week:
New signs of deterioration in the U.S. job market added impetus to appeals by Detroit’s auto makers for a bailout, as Democratic leaders in Congress and the White House neared an agreement to providing a down payment to keep the industry afloat until early 2009.
White House press secretary Dana Perino termed the discussions “constructive” on Saturday but stopped short of declaring a final deal had been reached.
“We have had constructive discussions with members of Congress from both houses, and both sides of the aisle,” she said in a statement. “We hope to continue to make progress toward assistance for the automakers based on important principles,” including use of the existing auto loan program and “very strong taxpayer protections.”
Late Friday, House Speaker Nancy Pelosi and the White House were “near a deal, but not 100%” on a plan to provide short-term funding for the Big Three auto makers, a senior congressional aide said.
White house spokesman Tony Fratto said the talks were “still fluid” but stressed officials were “making progress.”
The emerging deal would draw funds from a program originally meant to help the industry retool to meet higher fuel-economy standards. The actual funding level remains to be set, but is expected to come in the range of $14 billion to $15 billion, an amount the companies suggested Friday would be sufficient to carry them into March of next year. Other details remain to be worked out over the weekend.
But the proposed pact is expected to include a commitment to rapidly replenish the retooling program, a priority of the speaker. Also envisioned is strong government oversight, including the creation of a board that would help manage the industry’s restructuring.
It’s a reasonable compromise that deserves support from both sides of the aisle…
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