By Josh Mitchell and Michael R. Crittenden Of DOW JONES NEWSWIRES WASHINGTON -(Dow Jones)- The prospect of a government bailout of General Motors Corp. (GM) before the end of the year dimmed Thursday, with a leading Senate Democrat pointing to a lack of political will for a package and the top House Republican assailing the plans.
Senate Banking Committee Chairman Christopher Dodd said he knew of no Republicans who would support the $25 billion proposal by Democrats and said he was disinclined to move a bill without bipartisan support.
"I'd want to be careful about bringing up a proposition that might fail," given that a rescue plan would likely fare better under a President-elect Barack Obama administration, Dodd, D-Conn., told reporters on Capitol Hill. "There's some political considerations that need to be made over the next few days."
Prominent Republicans have questioned bailing out Detroit's long-struggling auto makers, and partisan differences threatened to derail the Democrats' plans. House Minority Leader John Boehner of Ohio issued a statement Thursday saying a multibillion rescue of Detroit auto makers would be "neither fair to taxpayers nor sound fiscal policy" without requiring dramatic reforms of the companies.
"What assurances will Democrats give taxpayers about their chances of getting their bailout money back?" Boehner asked, questioning why Democratic leaders have not insisted that auto makers produce a "credible plan to strengthen their financial health."
Democrats have said the legislation would include stiff conditions such as limits on executive compensation and standards for the development of fuel-efficient vehicles. But stronger conditions such as an overhaul of management at the U.S. auto makers and major company cost restructurings don't appear to be part of early discussions.
Boehner's words were significant not only because of his post but because he represents a state with a significant presence of auto-industry workers. Democrats are counting on winning over Republicans from auto industry states to gather enough support to pass a package.
House Speaker Nancy Pelosi, D-Calif., has asked Rep. Barney Frank, chairman of the House Financial Services Committee, to draft the rescue legislation, which she said would likely be introduced in a lame-duck session of Congress as early as next week.
U.S. auto makers are rapidly burning through cash reserves as car sales plummet and their access to credit tightens. GM has warned it may run out of money within months without outside help.
Democrats say collapse of one of the Big Three would threaten hundreds of thousands of jobs and further cripple the broader economy.
Bush administration officials have resisted Democrats' calls to use funds from the $700 billion financial rescue plan on the auto makers, and have said public dollars should be used to ensure a company's long-term viability.
Executives of GM, Ford Motor Co. (F) and Chrysler LLC, along with leaders of the United Auto Workers union, are expected to testify at a hearing of the House Financial Services Committee next Wednesday.
GM spokesman Greg Martin said the company will demonstrate it has made significant cost reductions in recent years and has a strong plan to turn the company around.
" We're going to have a good oppportunity next week to update Congress on all that we've done to reshape our business and develop new products," Martin said, adding the public has misperceptions about the causes of the auto makers' troubles.
Republicans have pointed out that Congress has already set aside $25 billion in loans to help auto makers modernize plants to make fuel-efficient cars, but that program has been tied up in red tape. Republicans have suggested that Congress pass legislation to free up those loans quicker, an option that Democrats might consider.
-By Josh Mitchell, Dow Jones Newswires; 202-862-6637; joshua.mitchell@dowjones.com
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(END) Dow Jones Newswires
November 13, 2008 17:01 ET (22:01 GMT)

Publié le 13 novembre 2008 Copyright © 2008 Dowjones