Democrats, White House Agree on $15 Billion Auto Plan

Congressional Democrats and White House negotiators agreed on the outlines of a $15 billion plan to give General Motors Corp. and Chrysler LLC federal loans to stay in business while requiring them to restructure their operations. A senior administration official said tonight the White House reached an agreement in concept with lawmakers and that negotiations on details were continuing. “Bipartisan hard work has paid off and I understand an agreement has been reached,” Senator Carl Levin of Michigan said in a statement. “This gets us to the 20-yard line, but getting over the goal line will take a major effort, particularly in the Senate where we need 60 votes.” GM and Chrysler have said they need at least $14 billion in combined aid to keep from running out of cash by early next year. The legislation would include protections for taxpayer money, including the appointment of a so-called car czar who could force the companies into Chapter 11 bankruptcy if the companies don’t come up with a business plan by the deadline of March 31, according to the official, who briefed reporters on the condition of anonymity. The car czar has until that date to negotiate with the companies and stakeholders to come up with a plan that satisfies the definition of long-term viability as set out in the legislation. The czar, who would be appointed by President George W. Bush, is required to call the loan if they haven’t agreed to a strategy by the deadline. 30-Day Extension The senior administration official said the president’s designee could grant one 30-day extension beyond the March 31 deadline if he or she decides there are ongoing, good-faith negotiations to come up with a road map for the future. “We are making progress and are optimistic that we will have a reasonable compromise that will protect taxpayers and ensure the long-term viability of the American auto companies,” Nadeam Elshami, a spokesman for House Speaker Nancy Pelosi of California, said in an e-mailed statement. The measure will not include a provision sought by Democrats that would have barred automakers accepting federal loans from suing states that seek to impose tougher auto-emission standards than are set by the federal government, the administration official said. Block Transactions The car czar would have the power to block the automakers’ financial transactions over a certain amount. The administration official said the level at which the government could intervene would be for transactions “significantly higher” than the $25 million in earlier drafts. The official didn’t specify the new figure. The official said the bill would seek to ensure that federal loans are not the first in a series to an industry that refuses to make fundamental changes, by barring the automakers from getting additional federal funds if they reach the deadline without an acceptable plan for viability. The administration will consult with representatives of President-elect Barack Obama on the appointment of the car czar, the official said. Levin, a Michigan Democrat, called on Bush and Obama to personally push for the measure’s passage. Some Republicans in Congress are resisting giving the loans. ‘Can’t Manage Itself’ Senator Tom Coburn, an Oklahoma Republican, would support an effort to filibuster the bill, his spokesman said earlier today. “He believes it’s naive to trust Congress to manage the auto industry when it can’t manage itself,” said Coburn spokesman John Hart. Jim DeMint of South Carolina said Senate Republicans have the 41 votes needed to force Democrats to allow amendments to the proposal. Also earlier, Senate Majority Leader Harry Reid warned lawmakers may be in session this weekend if objections are raised to voting earlier. “Everyone should understand we’re going to work until we complete this,” said Reid, a Nevada Democrat, on the Senate floor. Senator Judd Gregg of New Hampshire, the top Republican on the Budget Committee, told reporters he would support the bill if the czar had authority to require debt restructuring and to force unions to accept reduced pay and benefits. “I could support something I felt was going to lead to fundamental restructuring,” Gregg said. ‘Bone of Contention’ Representative Edward Markey, a Massachusetts Democrat, said that Democrats’ desire to bar automakers from suing over state-mandated emission requirements was “a big bone of contention,” adding that disagreement over the provision could unravel the deal. GM and 21 carmakers in June lost a bid in court to block California from quickly enforcing carbon-reduction rules if the state wins Environmental Protection Agency approval for greenhouse-gas emission caps. Ford Motor Co. fell 15 cents, or 4.4 percent, to close at $3.23 in New York Stock Exchange composite trading. GM fell 23 cents, or 4.7 percent, to $4.70. Ford, which would be eligible to apply for the loans, said again yesterday it doesn’t expect to.