U.S. lawmakers, White House agree on $15B auto bailout plan: officials

U.S. politicians have reportedly agreed on a plan to provide a $15 billion US emergency loan to the country's beleaguered automakers, although it's less than half the amount of bailout funds the Big Three car companies were seeking.

The White House and congressional Democrats reached an agreement in Washington, D.C., late Friday night, a senior congressional aide told Reuters.

Another source said that negotiators had "agreed in principle to moving ahead but details have to be worked out."

The breakthrough was said to have been made after the Speaker of the House of Representatives, Nancy Pelosi, caved to a condition set by U.S. President George W. Bush that the money come from a $25-billion Energy Department fund, according to officials from both the Republican and Democratic parties.

That fund provides advanced energy technology loans to assist auto companies produce more fuel-efficient cars.

Pelosi had previously demanded the aid come from the $700 billion fund created to rescue U.S. financial institutions — a proposal the Bush administration flatly rejected. In a statement issued Friday, Pelosi suggested she could agree to using Energy Department funds under certain conditions.

"We will not permit any funds to be borrowed from the advanced technology program unless there is a guarantee that those funds will be replenished in a matter of weeks so as not to delay that crucial initiative," Pelosi said.

In a separate statement, Pelosi said bailout legislation will include "rigorous and ongoing oversight to guarantee that taxpayers are protected and that resources are directed to ensure the long-term viability and competitiveness of the American automobile industry."

The terms of the aid will include the establishment of a trustee or overseer group to ensure the money is used properly to stave off collapse, according to officials from both parties.

Specific details on the conditions of the bailout loan, however, are still being worked out, likely over the weekend, a source told Reuters.

Many hurdles still to cross

Once it is settled, the automaker assistance plan would require the approval of both houses of Congress. Votes in the House of Representatives, as well as the Senate, are expected next week, Pelosi and Senate Majority Leader Harry Reid said in separate statements.

If they pass quickly, the bill could be signed into law by Bush before president-elect Barack Obama takes office.

Democrats, however, said Pelosi's intention was to have the aid built into an economic recovery bill that lawmakers are expected to prepare for Obama's approval once he takes office in January.

The $15-billion agreement is less than half of the $34 billion auto executives from the Big Three — General Motors Corp., Ford Motor Co. and Chrysler LLC — requested of Congress this week. It comes on the same day U.S. data showed employers cut more than 533,000 jobs in November, the biggest monthly loss in 34 years.

"I think it's fair to say that the jobs report today, this disastrous jobs report, has heightened the interest in doing something," said Massachusetts Representative Barney Frank, a senior House Democrat.

Both GM and Chrysler have warned of imminent collapse in the absence of government assistance.

The bailout funds are expected to last until March, at which point Obama's administration will have to decide how to proceed.

President expresses concern

Earlier Friday, Bush expressed deep concern for the fate of the country's auto giants.

"I am concerned about the viability of the automobile companies," Bush said.

"I'm concerned about those who work for the automobile companies and their families. And likewise, I am concerned about taxpayer money being provided to those companies that may not survive."

Thousands of employees have been laid off by the automakers in both Canada and the U.S. as they deal with slumping car sales.

The Canadian subsidiaries of GM, Ford and Chrysler on Friday asked the federal and Ontario governments for financial aid that could total as much as $6 billion.

The requests were made as the companies provided financial information and details of their restructuring plans that the governments had asked for in return for considering a potential aid package.

With files from the Associated Press, Reuters