Talks Turn to Terms for Auto Aid

Conditions Negotiated for $15 Billion in Emergency Loans

Talks continued yesterday between the White House and congressional Democrats over a plan to speed at least $15 billion in emergency loans to ailing Detroit automakers, with the two sides haggling over what conditions the car companies must meet before they get the money.

The White House is pressing a plan to name a powerful trustee -- or "car czar," as some have dubbed it -- within the Commerce Department with broad powers to force the companies to restructure or submit to bankruptcy, according to a copy of the plan. But some Democrats want to give the companies the money upfront and let President-elect Barack Obama name a car czar or full oversight board later, after he takes office.

With a stalemate finally broken over the source of the funding, policymakers on both ends of Pennsylvania Avenue seemed optimistic that a deal could be reached and presented to lawmakers in a special session early next week. White House press secretary Dana Perino called the talks "constructive" and said administration officials "hope to continue to make progress" through the weekend.

But Perino said the White House will insist that "that taxpayer assistance only be considered for companies willing to make the difficult decisions across the scope of their businesses to be viable and competitive in the future."

Meanwhile, Senate Republicans, who have resisted a bailout for the automakers, signaled that they may not stand in the way of the legislation.

"I look forward to reviewing the legislation being drafted to address the difficulties in our auto markets," Senate Minority Leader Mitch McConnell (R-Ky.) said in a statement. "As we consider this legislation, our first priority must be to protect the hard-earned money of the American taxpayer."

A breakthrough on the bailout came late Friday, when House Speaker Nancy Pelosi (D-Calif.) dropped her opposition to a White House proposal to tap an existing loan program to help the car companies survive the deepening recession. General Motors, Chrysler and Ford are seeking as much as $38 billion to help them stay afloat. GM executives have said that without government help, the company may not last the month.

Pelosi agreed to modify the loan program to provide GM and Chrysler with an immediate infusion of $15 billion to $17 billion, so long as the money is replenished and used for its original purpose: to spur the production of fuel-efficient vehicles.

Ford is also seeking access to government money, but executives have said they do not expect to need it unless the economy worsens dramatically.

In addition to pressing to replenish the loan program, Democrats are pushing for a provision that would bar the automakers from continuing their lawsuits against states that have adopted low greenhouse-gas emissions standards to promote the development of cleaner cars. Environmentalists and several states' attorneys general have asked Congress to uphold these stringent standards in any auto bailout legislation.

If an accord can be reached, there is no guarantee that rank-and-file lawmakers will accept it. Many Republicans and even some Democrats are reluctant to approve yet another bailout, especially for an industry that may fail nonetheless.

Yesterday, Sen. Bob Corker (R-Tenn.), issued a statement saying he is "disappointed in the plan that is being developed between the House Democrats and the White House" because it would not force the automakers and the United Auto Workers union to make painful and immediate concessions to restore profitability.