Washington: White House and congressional negotiators sought on Sunday to remove remaining differences over an emergency rescue for the US auto industry, a wounded giant of the struggling American economy.
Prodded by shock US unemployment figures which showed the country shed more than half a million jobs in November alone, negotiators tried to forge an agreement in principle to provide "The Big Three" American automakers with at least $15 billion in short-term loans.
Backers hope to win congressional passage this week. The measure would then be sent to President George W. Bush as one of the last ones he signs into law before Democrat Barack Obama succeeds him as president on Jan. 20.
The Senate is due back in session on Monday and negotiators hope to have a package ready that can win quick approval.
Lawmakers fear a recession will deepen if any of the three collapses. Some from Bush's Republican party are reluctant to approve another rescue plan following a $700 billion package they passed for Wall Street in October that triggered voter backlash in the Nov. 4 congressional elections.
Primarily Republican critics also contend market forces ought to determine the fate of the auto industry, not intervention from a government saddled with a record deficit.
Bailout backers, however, argue that since the government helped Wall Street, it must also help hundreds of thousands of blue-collar auto workers who have the support of Democrats.
Obama added his weight to the drive, saying while General Motors Corp, Ford Motor Co. and Chrysler LLC had made mistakes, letting them collapse was not an option.
"The auto industry is the backbone of American manufacturing," Obama said in a prerecorded interview with NBC's "Meet the Press" broadcast on Sunday.
"What we have to do is to provide them with assistance but that assistance is conditioned on them making significant adjustments," he said.
Conditions and concessions
In addition to reorganizing and protecting taxpayer investment, possible conditions include creating a government "car czar" to oversee the bailout, new corporate leadership and additional concessions by the United Auto Workers union.
Congressional aides said it was as yet unclear whether companies would have to implement at least some of the conditions or merely promise them before getting any money.
Senate Banking Committee Chairman Christopher Dodd said GM chairman Rick Wagoner should resign to allow new leadership to restructure the faltering company.
"He has to move on," Dodd, a Connecticut Democrat who is leading efforts to craft bailout legislation, told CBS's "Face the Nation."
Faced with plummeting sales they blame largely on the credit crunch and recession, GM, Chrysler and Ford sought $34 billion from Congress last week to avoid possible collapse. A deal negotiated by the White House and Congress would provide no more than $17 billion to last into March.
Critics have said any loans would be a waste of money unless US automakers were able to cut costs and better compete with more fuel-efficient, foreign-made cars.
Democratic Sen. Carl Levin of Michigan, whose state is home to the major automakers, said, "I am very confident there will be a deal. That will happen in 24 hours."
But in an appearance on "Fox News Sunday," he declined to predict if backers would garner the votes for passage, particularly in the 100-member Senate where 60 would be needed to clear a Republican procedural hurdle known as a filibuster.
"That's a much more complicated question," Levin said.
"We need to debate it and that is what a filibuster is about," said Sen. Richard Shelby, an Alabama Republican and a leading foe of the proposed "bridge loans" designed to help the automakers until they can get more permanent relief.
"This is a bridge loan to nowhere," said Shelby, appearing with Levin on "Fox News Sunday."
Senate Republican Leader Mitch McConnell indicated he might support a bailout, provided it had adequate safeguards.
"I look forward to reviewing the legislation being drafted to address the difficulties in our auto markets," McConnell said in a statement on Saturday.
"As we consider this legislation, our first priority must be to protect the hard-earned money of the American taxpayer," McConnell said.
A shock and a breakthrough
After months of stalled efforts to help the "Big Three" automakers -- a breakthrough emerged on Friday after the federal government reported an unexpectedly sharp downturn in US unemployment in November.
Employers slashed more than 533,000 jobs, the highest monthly decline in 34 years, and lawmakers feared hundreds of thousands more would be thrown out of work if any of the major automakers went down.
The Bush administration and congressional Democrats agreed later on the size of the planned rescue -- $15 billion to $17 billion in bridge loans to carry them into March.
They also cleared the biggest stumbling block with an agreement that the funding would come from an Energy Department loan program approved in September to help automakers make more fuel-efficient vehicles.