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Bush urges Congress to act to aid automakers
'Time is running out,' said Rep. Paul Kanjorksi, D-Pa., who added that the only option was a partial loan to keep General Motors Corp. and Chrysler LLC alive through March. 'I think you're skating on extremely thin ice.' Rep. Stephen F. Lynch, D-Mass., said he wasn't convinced of the plans. 'We need a domestic auto industry in the United States,' Lynch said. 'It might not be the Big 3. It might be the Big 2.' Bush urged Congress to quickly pass $25 billion in emergency aid for automakers next week by tapping an Energy Department retooling program. 'It is important that Congress act next week on this plan,' Bush said. 'I am concerned about the viability of the automobile companies.' He said that money could be 'used so long as the companies make hard choices on all aspects of their businesses to prove that they cannot only survive but thrive,' Bush said. 'It's important to make sure that taxpayers' money be paid back if any is given to the companies.' But the White House and Congress are still at odds over what funds to tap to aid automakers. In an interview, Kanjorski said the dispute over what pot of money to use was ridiculous. 'This is some sort of manliness fight between the Executive Branch of government and the Congress and 3 million people's jobs, thousands of businesses and three of our major auto manufacturers are the ones that are going to pay a terrible price and the American economy and that's intolerable,' Kanjorski said. 'What the American people ought to do is get on the telephone and say 'Cut this out kids. Get down and act like adults. Get this resolved.' ' Rep. Barney Frank, D-Mass., the committee's chairman said lawmakers shouldn't look to punish automakers for mistakes. 'We need to prevent further damage to the country,' Frank said. 'For us to do nothing, to allow bankruptcies and failures in one, two or three of these companies in the midst of the worst credit crisis and the worst unemployment situation that we've had in 70 years would be a disaster.' Rep. Tom Price, R-Ga., said it was 'humiliating' for auto executives to be getting business advice from members of Congress. Sen. Majority Leader Harry Reid, D-Nev., said the loss of 533,000 jobs in November -- the largest single-monthly drop since 1974 -- was a critical reason to aid automakers. 'We must also prevent the automakers from collapsing, or we risk adding millions more Americans to the unemployment line,' Reid said. 'Congress has an obligation to keep this dangerous situation from getting worse. Inaction is not an option.' United Auto Workers President Ron Gettelfinger said Friday the unionis willing to consider additional concessions to save the companies. 'There has to be a restructuring in this industry. This is about survival,' Gettelfinger said. 'We can't sugarcoat it. We can't stick our heads in the sand.' The top Republican on the panel, Rep. Spencer Bachus of Alabama, said he could support 'limited transitional assistance to allow the American domestic automobile industry to return to solvency and profitability,' he said. 'What we need is a solution, not a first installment.' Bachus noted that Chrysler Financial and Ford Motor Credit Co. both applied three years ago to become industrial banks, a designation that could make it easier to raise funds. CEO Robert Nardelli said ifChrysler receives a $7 billion government loan, it would obtain $4 billion in cost concessions from debt holders, the UAW and other stakeholders by March 31. Ifit wasn't successful by then, the government could call back its loan, he said. GM says it needs $4 billion to survive through Jan. 31, while Chrysler needs $4 billion to last until March 31, the CEOs testified Thursday. Rep. Thaddeus McCotter, R-Livonia, proposed a compromise to take half of the funds needed by automakers from the $700 billion Wall Street bailout package and half from the $25 billion Energy Department retooling program. Rep. Gary Ackerman, D-N.Y., who ripped automakers for coming to hearings last month in private jets, said they were getting 'a second chance to make a first impression.' 'I don't want to send you home again because it's going to get more expensive,' Ackerman said, noting that the request had jumped from $25 billion to $34 billion in two weeks. Automakers 'had faced the fury of the American people' over the lack of accountability for the $700 billion Wall Street package. Rep. Sander Levin, D-Royal Oak, said Friday he thinks House and Senate leaders will meet Friday after the House hearing to decide whether to call Congress back next week. He acknowledged that the legislative road would be more complicated, but said he still thinks Congress can act. He called legislative efforts 'fluid and active.' And he said he still hopes the Bush administration will act. 'You have to answer the 'whether' before you answer the 'how,' ' he said. 'I think the 'whether' pieces are falling into place.' The hearing comes one day after a six-hour Senate hearing left the automakers no closer to securing the aid. The automakers offered new concessions Thursday in a desperate plea for the emergency loans. As hopes for congressional approval dimmed, House Speaker Nancy Pelosi, D-Calif., and Sen. Majority Leader Harry Reid, D-Nev., urged President Bush late Thursday to tap the Wall Street rescue funds to help the automakers. In a letter that was also signed by the heads of the committees holding hearings this week, the lawmakers said they were hopeful that they could work 'cooperatively' with the administration to 'provide urgent assistance and support our domestic auto industry.' The Detroit News has learned that the White House held discussions as recently as Wednesday among various Cabinet departments about how the administration could aid automakers in the event Congress cannot agree on providing funding, but Bush has not decided whether he would step in. One issue under discussion is whether the administration could shift some of the $700 billion Wall Street bailout money to automakers if Congress doesn't act to prevent their collapse. GM and Chrysler are most urgently in need of a cash infusion. GM said it needed $4 billion this month to stay afloat as part of its $18 billion request in loans and a line of credit. Chrysler said it needs $4 billion to get through the first quarter of 2009, while Ford has asked for a $9 billion 'stand-by' line of credit. You can reach David Shepardson at (202) 662-8735 or dshepardsondteom.