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WORLD> America
Lawmakers, White House agree on $15b auto bailout
(Agencies)
Updated: 2008-12-06 12:11

WASHINGTON -- Congressional Democrats and the White House have reached agreement on emergency aid for US automakers of between $15 billion and $17 billion, two senior congressional aides said on Friday.


Richard Wagoner Jr., chairman and CEO of General Motors, Robert Nardelli, CEO of Chrysler, Alan Mulally, president and CEO of Ford, and Ron Gettelfinger, president of the United Auto Workers, testify at a hearing on the US auto industry on Capitol Hill in Washington, DC.[Agencies] 

The outline of the package was reached after auto executives pleaded with lawmakers for help and US data showed employers axed more than 533,000 jobs in November, the highest monthly job-loss in 34 years.

"Congressional Democrats and the White House have reached an agreement," a senior congressional aide said.

Another source said negotiators had "agreed in principle to moving ahead but details have to be worked out."

The amount is far less than the $34 billion requested this week by General Motors, Ford Motor, and Chrysler, but it would keep them going into next year.

Earlier, US House of Representatives Speaker Nancy Pelosi had dropped her insistence that aid come from the $700 billion financial services bailout fund that the Bush administration had refused to use for automakers.

A source with knowledge of the discussions said the money would come from an existing $25-billion advanced energy technology loan fund to help auto companies meet new fuel-efficiency standards -- an idea the White House has promoted.

In a statement Pelosi had suggested she could agree with that source of funds under certain conditions.

"We will not permit any funds to be borrowed from the advanced technology program unless there is a guarantee that those funds will be replenished in a matter of weeks so as not to delay that crucial initiative," she said.

Compromising on the source of funds would likely build bipartisan support in Congress for a bill that could be signed into law by President George W. Bush, a Republican.

White House spokesman Tony Fratto declined to comment on any discussions related to the automakers bailout.

Both Pelosi and Senate Majority Leader Harry Reid said in statements they expected to have votes next week on an automaker assistance plan.

Congress and the White House are anxious to prevent the threatened near-term collapse of one or more of the Detroit Three - which directly employ 250,000 people.

"In the midst of the worst economic situation since the Great Depression it would be an unmitigated disaster," said Rep. Barney Frank, chairman of the House Financial Services Committee, at a hearing with the chief executives from the automakers.

GM and Chrysler have asked for immediate loans to forestall possible failure, while Ford is asking for a $9 billion credit line that would be tapped later if necessary. GM wants $12 billion in loans, with $4 billion of that immediately, as well as a $6 billion credit line. Chrysler wants $7 billion.

Chrysler CEO Bob Nardelli told Frank's committee on Friday that the company needs $4 billion to run operations through March. Over the same time frame, GM CEO Rick Wagoner said his company needs $10 billion to keep going.

Ford CEO Alan Mulally said again that his company does not immediately need to use federal funds.

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