(Updates with a source saying there's an agreement in principle and adds details throughout)
WASHINGTON (AFP)--Congress on Saturday reached an "agreement in principle" to loan billions of dollars to struggling U.S. automakers, with a vote looming next week lawmakers hope will avert the industry's collapse.
The short-term loan package of at least $15 billion could be a lifeline to keep the Big Three automakers afloat, but is about half what auto chiefs say is needed to stave off bankruptcy.
"There is no final deal, but an agreement in principle," a source close to Democratic lawmakers told AFP, speaking on condition of anonymity.
After locking horns with the White House over whether to borrow cash from a federal loan program for green auto technologies, Democrats dropped their opposition following the release of gloomy official data showing 533,000 U.S. jobs were lost last month alone.
As auto chiefs pleaded for an urgent rescue, Democratic House Speaker Nancy Pelosi signaled her approval for a loan from the $25 billion energy-efficient stimulus fund, but said the "short-term and limited assistance" must be swiftly repaid.
"We will not permit any funds to be borrowed from the advanced technology program unless there is a guarantee that those funds will be replenished in a matter of weeks so as not to delay that crucial initiative," she said.
Chiefs of General Motors Corp. (GM), Chrysler LLC and Ford Motor Co. (F), which employ millions of U.S. workers, this week threatened the industry's imminent demise if Congress and the White House didn't reach a compromise on the funding showdown.
Democrats previously called on the White House to tap an already approved $700 billion finance industry bailout known as the Troubled Assets Relief Program, or TARP, to rescue the firms.
But President George W. Bush insisted the money should come from diverting $25 billion in loans for the industry to develop fuel-efficient vehicles.
Media reports said the loan package could be worth $15 billion to $17 billion, or about half of the $34 billion bailout the Big Three chiefs said was necessary for them to survive.
Congressional aides told the Washington Post that the package aimed to sustain automakers through March, after president-elect Barack Obama will have moved into the White House and the new Congress is in office.
Legislation on the plan is expected to be "brought up for a vote in the House next week," said Pelosi.
The compromise is expected to free up the remaining $350 billion from the $700 billion TARP fund to bail out the financial industry.
Senate Majority leader Harry Reid said he hoped his chamber would also vote on a bailout in a lame duck session, and pressured Republicans to help push the rescue bill through.
"We will need support and cooperation from Republicans to determine when that vote happens and whether it will succeed," Reid said, adding that the auto hearings this week "made clear that we cannot let these companies fail."
Bush warned after the half-a-million job loss announcement for November that at least one of the Big Three automakers may not weather the current economic storm.
Expressing skepticism of an industry rescue, Bush said: "I am concerned about taxpayer money being provided to those companies that may not survive."
In the hearings before Congress, Ford CEO Alan Mulally made clear the failure of one of the major companies could result in the demise of its competitors.
"If one of us goes in, it has the potential to take all of us in," he said.
Some lawmakers insist the firms should use bankruptcy protection as they restructure, but auto executives maintain the move would prompt consumer confidence in their products to plummet.
In exchange for any assistance, the auto companies will have to submit to strict government oversight to ensure loans are used effectively.
GM requested a total of $12 billion in short-term loans and a $6 billion line of credit, while Ford said it needed a $9 billion line of credit and Chrysler said it needed $7 billion by Dec. 31.
United Auto Workers chief Ron Gettelfinger warned on Thursday that time was short.
"I believe that we could lose GM by the end of the month," he said.
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(END) Dow Jones Newswires
December 06, 2008 17:29 ET (22:29 GMT)

Publié le 06 Décembre 2008 Copyright © 2008 Dowjones