Prospects weakened Monday for a $25 billion bailout for the faltering auto industry before year's end, as congressional Democrats and the Bush administration seemed headed for a stalemate.
Help for Detroit's Big Three automakers, which have been battered by the economic meltdown that has choked their sales and frozen their credit, is falling victim to a partisan fight over where the money should come from.
Senate Democrats said they would press ahead with their plan to carve out a portion of the $700 billion Wall Street bailout to pay for the automaker loans, but lobbyists and aides in both parties tracking the plan acknowledged they did not have the votes.
The White House and congressional Republicans insist that the automaker bailout money instead come from redirecting a separate $25 billion loan program approved by Congress to help the industry develop more fuel-efficient vehicles.
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Besides opposing the use of any of the $700 billion banking bailout for the automakers, congressional officials said Monday that the Bush administration has told top lawmakers it does not plan to ask for the second half of that huge fund, which Congress approved this fall to aid the financial industry.
The Treasury Department said its message on not tapping half the fund applied only to the next few days and that no decision had been made for the rest of the administration's two months. But officials stopped short of saying the funds would be used before Bush leaves office.
Majority Leader Harry Reid, D-Nev., said he would hold a test vote this week on a broad economic aid plan – including spending on public works projects, aid to cash-strapped states, an extension of jobless aid, and the carmaker loans –a vote most now concede has virtually no chance of passing.
If that fails, he will seek a vote on the auto industry bailout and the unemployment benefits, Reid said. It could come as early as Wednesday.
“I ask my colleagues to show the American people that in the face of tremendous economic pain and uncertainty, we will not wait until January,” Reid said as he opened a postelection session.