(Recasts, adds Democratic bill blocked by Republicans)
By John Crawley and Kevin Drawbaugh
WASHINGTON, Nov 19 (Reuters) - Prospects for a
Congressional bailout of the U.S. auto industry faded further
on Wednesday with little expectation that Democratic leaders
would support a compromise in the works, with little time left
for action.
The last ditch effort to extend $25 billion in aid to
General Motors Corp, Ford Motor Co and Chrysler LLC hinged on
negotiations that are supported by Republicans and the
"lame-duck" White House.
"I won't say it's completely over. I'm still having
conversations with people. But it doesn't look good," Sen.
Robert Bennett, a Utah Republican, said of chances lawmakers
would strike a deal that could pass.
Senate Banking Committee Chairman Christopher Dodd, a
Democrat, said chances of a compromise bill emerging were
"remote."
Congress has at most two days remaining in its
post-election session. Without a deal in that time, automakers
will likely have to wait until the new Congress and the Obama
administration are in place in January.
Automakers facing a rapidly worsening liquidity crunch are
urgently seeking help now to avert what industry executives
this week said at congressional hearings soon could be the
failure of one or more of the Big Three U.S. automakers.
"We don't like being here asking for this," GM Chief
Executive Rick Wagoner told the House of Representatives
Financial Services Committee on Wednesday.
"So at this point, without injections of liquidity ...,
probably some portion of the domestic industry will not
survive," Wagoner said.
With a Democratic-sponsored $25 billion bailout proposal
off table in the Senate, the emphasis shifted to a compromise
package based on a strategy Democratic leaders have already
dismissed as unacceptable.
But Minority Leader Mitch McConnell said in remarks on the
Senate floor that the compromise "is the only proposal being
considered" that has any chance of becoming law now.
The approach spearheaded by Republicans Christopher Bond of
Missouri and George Voinovich of Ohio would, according to
McConnell and other lawmakers, amend extend $25 billion in
loans approved in September for helping Detroit retool
factories and make more fuel-efficient cars.
A number of strings attached to the retooling money would
have to be cut or reworked to make it available immediately for
operational and other pressing needs.
"We've made great progress. We're down to wording
challenges," Bond said in remarks on the Senate floor Wednesday
night.
Bond proposed the Senate consider the measure on Thursday,
but Majority Leader Harry Reid objected on grounds no one had
yet seen the bill.
He promised to try to move forward on any compromise
despite the tangled politics engulfing the bailout and the
evaporating time for action.
"No matter how hard we work no matter how hard we try, the
House of Representatives is going home tomorrow. They're
leaving" for the year, Reid said. "I understand the importance
of this but I would hope that in addition to understanding the
importance of this we have to face reality."
Due to weak support and Republican objections, Democrats
abandoned plans for a procedural vote on a proposal backed by
Reid to tap money from the U.S. Treasury Department's financial
services rescue fund to help Detroit automakers.
With a razor thin majority, Senate Democrats need some
Republican support to pass legislation.
Details of the evolving compromise were kept under wraps,
but Carl Levin, a Michigan Democrat and chief proponent of
bailout efforts in the Senate, told reporters the common goal
was still $25 billion.
Other supporters also said that taxpayer protections and
other conditions limiting executive pay would be included.
"It would be unthinkable for Congress not to be able to
reach a conclusion when the leadership of the Congress, the
president and president-elect all say they support bridge
loans," Levin said.
Democratic Rep. Barney Frank, chairman of the House
Financial Services Committee and champion of a bailout plan
similar to the one derailed in the Senate, said amending the
retooling legislation, as he understood it, would meet
resistance in the House.
"It would be sending the wrong signal to rescind the
environmental restrictions," Frank said of core provisions in
the retooling bill aimed at helping Detroit meet tougher new
fuel efficiency standards.
(Additional reporting by Matt Spetalnick, Thomas Ferraro,
John Poirier, Donna Smith and Rick Cowan; editing by Gerald E.
McCormick, Matthew Lewis, Richard Chang)
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