by Ken Thomas
The Associated Press
The Bush administration sharply criticized congressional Democrats on Friday for taking a recess without approving a multibillion-dollar lifeline for the Big Three U.S. automakers.
"It is appalling that Congress decided to leave town without addressing a problem that they themselves said needed to be addressed," White House press secretary Dana Perino said.
A bailout-shy Congress eased its way out of a $25 billion auto industry rescue bill on Thursday as Democratic leaders announced they would not help the beleaguered automakers until the companies presented them with a plan that would show how they would use federal money to stabilize and reprogram their faltering businesses.
"The executives of the auto companies have not been able to convince Congress or the American people that this government bailout will be its last," said Senate Majority Leader Harry Reid, the chamber’s top Democrat. He said General Motors Corp., Ford Motor Co., and Chrysler LLC must submit their plan to Congress by Dec. 2.
Hearings are expected and lawmakers could consider legislation during the week of Dec. 8, but only if the industry has shown that the federal treasury taxpayers and auto workers would be protected, congressional leaders said.
Perino called the plan "mind-boggling."
"How in the world are 535 members of Congress going to determine the viability of a company?" she said. "They can’t even get together to pass a Mother’s Day resolution."
Perino spoke to reporters while flying with President George W. Bush to an economic summit in Peru.
The Bush administration wants Congress to consider a plan to let the automakers tap a separate $25 billion loan program for fuel-efficient cars for their short-term cash needs.
U.S. automakers are struggling to stay afloat heading into 2009 amid an economic meltdown, a precipitous drop in sales and a tight credit market. The three companies burned through nearly $18 billion in cash reserves during the last quarter, and GM and Chrysler have said they could collapse in weeks.
Detroit’s car makers employ nearly a quarter-million workers, and more than 730,000 other workers produce materials and parts that go into cars. If just one of the automakers should declare bankruptcy, some estimates put U.S. job losses next year as high as 2.5 million.
Congress, meanwhile, is weighing a tricky political question: Should it spend billions more on government bailouts or run the risk of bearing the blame of a U.S. auto industry meltdown?
Supporters of a bipartisan agreement to temporarily divert the fuel-efficiency funds to cover the auto companies’ operations said they hoped to win support in December.
"We need speed," said Sen. Carl Levin, a Democrat from Michigan, the heart of the U.S. automotive industry. "This is a very, very important moment."
Reid and House Speaker Nancy Pelosi, a Democrat who controls operations of the House of Representatives, said a $25 billion bailout proposal that would have tapped loan money from the $700 billion bailout plan lacked enough support in Congress, and the auto industry did not help matters with its high-profile appearances on Capitol Hill.
The chief executives of the Big Three urged lawmakers to sign off on the loans this week, saying the economic meltdown had staggered their industry after they had acted to restructure and produce more fuel-efficient cars.
They were roundly criticized for traveling to Washington aboard corporate jets to seek billions in government aid and failing to assure lawmakers they would not need more money.
"What happened here in Washington this week has not been good for the auto industry," Reid said. "These guys flying in their big corporate jets doesn’t send a good message to people in Searchlight, Nevada, or Las Vegas or Reno or any place in this country. We want them to get their act together."
Automakers quickly issued statements Thursday promising to submit the blueprint Democrats have demanded. But even if lawmakers return to vote, they probably will insist on numerous conditions on any loans, including a chance to share in future profits by the auto companies and limits on executives’ pay.
Associated Press writers Julie Hirschfeld Davis, David Espo, Andrew Taylor and Jennifer Loven contributed to this report.