WASHINGTON - Prospects dimmed Monday for enactment of a $25 billion bailout for the faltering auto industry before year's end, as congressional Democrats and the Bush administration seemed headed for a stalemate.
Help for Detroit's Big Three, which have been battered by the economic meltdown that has choked their sales and frozen their credit, is falling victim to a partisan fight over where the money should come from.
Senate Democrats said they would press ahead with their plan to carve out a portion of the $700 billion Wall Street bailout to pay for the loans, but aides in both parties and lobbyists tracking the plan acknowledged they did not currently have the votes to do so. The White House and congressional Republicans insist that the automaker bailout money instead come from redirecting a separate $25 billion loan program approved by Congress to help the industry develop more fuel-efficient vehicles.
In addition, besides opposing the use of any of the $700 billion for the automakers, the administration has told top lawmakers it does not plan to ask for the second half of that huge fund that Congress approved this fall to aid the financial industry, congressional officials said Monday.
The Treasury Department said its message on not tapping half the fund applied only to the next few days and that no decision had been made for the rest of the administration's two months - but officials stopped short of saying the funds would be used before Bush leaves office.
Majority Leader Harry Reid, D-Nev., said he would hold a test vote this week on a broad economic aid plan - including spending on public works projects, aid to cash-strapped states, an extension of jobless aid, and the carmaker loans - that most now concede has virtually no chance of passing.
If that fails, he will seek a vote on the auto industry bailout and the unemployment benefits, Reid said. It could come as early as Wednesday.
'If we move forward, we can protect and create American jobs, help working families and prevent our economy from falling even further into recession,' Reid said as he opened a postelection session. 'I ask my colleagues to show the American people that in the face of tremendous economic pain and uncertainty, we will not wait until January.'
The White House, meanwhile, took pains to clarify its position on the bailout, saying the administration 'does not want U.S. automakers to fail.' Press secretary Dana Perino complained that reporting on the White House's statements on this issue has involved 'attempts to shorthand the administration's position.'
Perino's statement also made clear, however, that the administration steadfastly opposes drawing funds from the bailout plan to help Detroit. The White House opposes the idea of automakers getting an additional $25 billion.