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Congress puts brakes on bailout legislation

Bond says Big Three won't get blank check.

Pamela Brogan • Gannett News Service • November 21, 2008

Washington -- Democratic leaders in Congress sidetracked legislation to bail out the auto industry Thursday and demanded the Big Three develop a plan assuring the money would make them economically viable.

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"Until they show us a plan, we cannot show them the money," said House Speaker Nancy Pelosi, D-Calif.

House and Senate Democrats want automakers to submit an economic plan to Congress by Dec. 2. Lawmakers would then return to Washington on Dec. 8 to vote on the proposal.

The decision averted a likely defeat of legislation providing $25 billion loans for the industry.

The bipartisan loan package would not be a blank check for the auto industry, Sen. Christopher "Kit" Bond said Thursday.

The Missouri Republican, who helped draft the plan, said it would require the auto industry to "show how they will get to viability, financial stability and profitability" before they could qualify for the loans.

"There are a lot of steps that the auto industry is going to have take," Bond said. "One would suggest selling corporate jets might be one."

General Motors Corp., Chrysler LLC, and Ford Motor Co. officials flew to Washington in private corporate jets, then asked for billions in taxpayers' dollars.

Proponents of the loan plan had hoped for a Thursday vote, but the bill stalled because of differences over how the loans would be funded.

The loan money in the bipartisan plan would come from a Department of Energy program approved by Congress in September. President Bush supports the bipartisan plan.

But Democrats objected, saying it would siphon money from a program needed to make cars more fuel-efficient.

Instead, they wanted to provide the $25 billion in loans to the auto industry by tapping into the Treasury Department's $700 billion rescue plan for the nation's financial markets.

Sen. Carl Levin, D-Mich., who helped craft the bipartisan plan, said it was crucial to provide the loans quickly to prevent a depression.

That's "a real possibility if one or more of the domestic auto companies goes under," he said.

In Missouri, 221,000 jobs depend on the auto industry, including 36,200 people employed by the automakers, according to the Alliance of Automobile Manufacturers, a trade group.

Auto-related jobs account for 8 percent of the state's work force and $7.6 billion in wages.

There are five manufacturing plants in the state: two Chrysler plants and one Ford plant in St. Louis, one Ford plant in Claycomo and one GM plant in Wentzville.

This story includes information from the Associated Press.

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