Saturday, December 6, 2008

Lawmakers and White House agree on auto aid plan

A Band-Aid Is Coming!

WASHINGTON (Reuters) - Congressional Democrats and the White House have reached agreement on emergency aid for U.S. automakers of between $15 billion and $17 billion, two senior congressional aides said on Friday.

The outline of the package was reached after auto executives pleaded with lawmakers for help and U.S. data showed employers axed more than 533,000 jobs in November, the highest monthly job loss in 34 years.

"Congressional Democrats and the White House have reached an agreement," a senior congressional aide said.

Another source said negotiators had "agreed in principle to moving ahead but details have to be worked out." More talks were expected on Saturday with Congressional votes on a bill next week.

The temporary funding amount is far less than the $34 billion in loans requested this week by General Motors, Ford Motor, and Chrysler, but it would keep them going into next year.

Daniel Weiss, a senior fellow with the Center for American Progress, said he expected Democratic lawmakers to seek more money for automakers after a new Congress meets and Barack Obama is sworn in as president on January 20.

"A short-term loan agreement is like putting a Band-Aid on a hemorrhage and they will still have to try and save the patient in January," said Weiss.

The automakers say they need help to survive a sharp downturn in sales fueled first by the credit crisis and now recession.

At hearings this week, many lawmakers were skeptical of the automakers' viability, arguing they had failed in the past to cut sufficient costs, ween themselves from making gas guzzlers and produce innovative cars consumers want to buy....More

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