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It's Morning Edition from NPR News. Good morning, I'm Steve Inskeep.
RENEE MONTAGNE, host:
And I'm Renee Montagne. Executives from the Big Three automakers plead their case on Capitol Hill today. Without government assistance, the car companies could be facing bankruptcy. Some in Congress want to provide loans. The White House opposes tapping into the federal rescue package. And with no consensus on what to do for Detroit, the carmakers may have a hard time getting a quick answer. NPR's Brian Naylor reports.
BRIAN NAYLOR: There are at least two schools of thought in Washington about how to help the auto industry - help most lawmakers agree is probably necessary. Senate Majority Leader Harry Reid wants the government to carve $25 billion from the already approved $700 billion Wall Street bailout package.
Senator HARRY REID (Democrat, Nevada; Senate Majority Leader): The Treasury Department has acknowledged that they could provide the auto companies the temporary assistance to keep automakers solvent by taking money our of the $700 billion we have already provided to the Treasury Department, but the secretary of Treasury said that he chooses not to do that.
NAYLOR: Indeed, the Bush administration says the Wall Street bailout plan was not designed to help industries other than the financial sector. Their solution is for lawmakers to give auto companies access to $25 billion approved last year to help them make more fuel-efficient cars. Democrats say that money is off the table. While there are disagreements over where to get the funds, lawmakers are also pointing fingers over whom to blame for Detroit's woes. Auto industry executives are a favorite target. Here's Florida Democrat Bill Nelson.
Senator BILL NELSON (Democrat, Florida): We need new people, new eyes, new ears to steer us out of this mess. We cannot reward those leaders whose poor decisions and poor judgment and sometimes selfishness got us to where we are now.
NAYLOR: Under the Democrats' proposal, automakers who receive government loans couldn't pay bonuses to executives who make over $250,000 a year. But Arizona Republican Jon Kyl says it's labor costs that are to blame for the industry's problems.
Senator JON KYL (Republican, Arizona): The car companies have made some contracts with the United Auto Workers labor union primarily that are literally dragging them down. It's like asking somebody to swim with a 50-pound weight around their neck. And it's no wonder they can't meet the obligations under the contracts and need taxpayer assistance.
NAYLOR: Kyl says GM should reorganize under Chapter 11 of the bankruptcy code. Industry backers say that could be fatal to the company because consumers would resist buying a new car from a company perceived to be bankrupt. Another idea co-sponsored by Democratic Senator Barbara Mikulski of Maryland seeks to spur demand for new cars by giving consumers a tax break for buying one by the end of the year.
Senator BARBARA MIKULSKI (Democrat, Maryland): People say, well, what is the cost of this, Senator Barb? Well, I'll tell you. It's about $8 billion. And they go, oh, well, we just spent 350 billion and threw it down the rat hole? We don't have anything to show for this 350 but more arrogance, more greed. And while they want America to go on Lean Cuisine, they're doing spa cuisine.
NAYLOR: Along with the help for the auto industry, Senate Democrats are also pushing to extend unemployment benefits for up to 13 weeks, which the House has already approved. Democratic Senator Sherrod Brown of Ohio called it the right thing to do.
Senator SHERROD BROWN (Democrat, Ohio): It holds one important advantage over the financial bailout. The people who benefit from an extension of unemployment compensation, from an extension of unemployment insurance - the people who benefit directly live on Main Street, not a single Wall Street CEO in sight.
NAYLOR: In the end, unemployment benefits are likely to pass this week, but there is little consensus on how to proceed on an auto bailout, making action in this lame-duck session unlikely. Brian Naylor, NPR News, the Capitol. Transcript provided by NPR, Copyright NPR.
