Democratic congressional leaders said Tuesday they were ready to push emergency legislation to aid the imperiled auto industry when lawmakers return to Washington next week for the first time after the election.
“During the lame-duck session of Congress, we are determined to pass legislation that will save the jobs of millions of workers whose livelihoods are on the line,” Senate Majority Leader Harry Reid said in a statement.
Earlier, House speaker Nancy Pelosi had said Congress and the Bush administration “must take immediate action” to stave off a collapse of the U.S. auto industry.
Pelosi stopped short of saying Congress would adopt legislation to provide emergency funds to the automakers, giving the Treasury Department the option of using money from the $700 billion bailout program instead.
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But with the White House insisting that the bailout money be reserved for financial institutions, that option seemed unlikely, leading a senior Democratic official to say that Democrats would try to force President Bush's hand.
Congressional aides said that Democrats, should they move ahead with emergency legislation, would have to decide whether to put forward a stand-alone measure for the auto industry or include the aid in a wider economic stimulus measure. Such a package is likely to include extended unemployment benefits, aid to strapped states and cities, new money for health care and food stamps and possibly money for public works projects — all programs the administration has resisted.
Reid and Pelosi have urged the administration to help the major automakers, especially General Motors, which is fast depleting its cash reserves and seems to be hurtling toward bankruptcy. GM shares, pummeled for weeks, fell an additional 13 percent Tuesday to $2.92, the stock's lowest point since 1943. On Monday, GM warned shareholders that it might not be able to continue as a “going concern.”
At a meeting Monday at the White House, President-elect Obama also urged Bush to help the automobile companies, and congressional aides said Democratic leaders were coordinating their activities with his transition team.
“In order to prevent the failure of one or more of the major American automobile manufacturers,” Pelosi said, “which would have a devastating impact on our economy, particularly on the men and women who work in that industry, Congress and the Bush administration must take immediate action.”
A senior Democratic official, who did not want to be identified talking publicly about party strategy, said Pelosi had decided to challenge Bush to work with the Democrats or veto aid to the teetering auto companies – and take the blame if one of them fails.
The White House has resisted calls by Congress to use the $700 billion to help the automakers, saying that money is better spent easing the credit crunch at the heart of the economic crisis.