Politics & Government

White House's help to automakers might defuse Democrats' plans

Under the Capitol dome, Congress is voting on the financial bailout bill.
Under the Capitol dome, Congress is voting on the financial bailout bill. Chuck Kennedy / MCT

WASHINGTON — The White House Friday tried to take steam out of Congress' bid to give new aid to the ailing auto industry, saying it would make it easier for the carmakers to tap $25 billion in an existing federal loan program.

But Congress wants to spend more, and the Senate next week plans to debate whether to approve an additional $25 billion from the financial rescue package to help the Big Three American auto companies.

It as not clear whether the latest White House move would defuse Democratic sentiment as lawmakers prepare for a lame duck session scheduled to begin Monday.

Some Democrats, notably�House Speaker Nancy Pelosi, want to go even further and pass a broad stimulus package, but it's unlikely she has the votes.

The easier step for Democrats would be to wait two months until Barack Obama is inaugurated and the 111th Congress convenes with much larger party majorities. But economic indicators are growing more dismal by the day, concerns about last month's $700 billion financial rescue plan keep surfacing and automakers warn they're in desperate need of cash.

Those familiar with leadership strategy say that after all this week's speechmaking and negotiating, lawmakers will push especially hard to see that no one goes home without helping the unemployed and the auto industry.

Senate Majority Leader Harry Reid, D-Nev., who called the administration's Friday plan "unacceptable," was unequivocal. "Senate Democrats are committed to doing all we can to help the auto industry."

Pelosi was equally adamant, urging "immediate action."

Reid said there'd be a vote in the Senate on Wednesday.

The auto and unemployment issues hit too close to home for many members, especially with Thanksgiving and Christmas just ahead. The October unemployment rate hit 6.5 percent, the worst monthly showing in 14 { years, and on Thursday, the Labor Department reported the number of jobless claims hit its highest level in eight years.

"Americans losing their jobs every day cannot wait for the next administration to take action," said House Majority Leader Steny Hoyer, D-Md. The House passed $6 billion in extra benefits in September; the Senate did not act.

Even diehard opponents of the big stimulus plans last week offered sympathy for unemployment aid.

"If another stimulus package is passed, that kind of provision is more valuable. At least it would be more helpful," said Sen. Michael Crapo, R-Idaho.

The auto fight is far less predictable. Congress is considering several approaches, notably making it clear that $25 billion from the financial rescue plan should be used to help the industry. Union loyalists are also pushing another $25 billion package that would help pay the pension and health care costs of 780,000 industry retirees and their families.

Lawmakers' thinking on the proposals is likely to become most apparent early next week, as both the Senate Banking Committee and the House Financial Services Committee hold hearings on the issue. The hurdle is the GOP; many Republicans are wary of any more government help for private industry.

"Spending billions of additional federal tax dollars with no promises to reform the root causes crippling automakers' competitiveness around the world is neither fair to taxpayers nor sound fiscal policy," said House Republican leader John Boehner of Ohio.

Rep. Spencer Bachus of Alabama, the top Financial Services Committee Republican, said that he has trouble explaining the package to constituents.

"That sawmill worker in my district who's making $15 an hour, he's working hard every day and he gets very dirty every day," he said, "and we're taking his money and we're paying it to a company that's paying $75 an hour?"

Such attitudes make it even more unlikely that a more ambitious stimulus plan will succeed, as Republicans try to show they're serious about curbing spending. The GOP lost an estimated 20 House and seven Senate seats earlier this month, and the most vocal survivors are the hardliners, who are poised to quickly take control of the House party leadership.

Boehner will be challenged by Rep. Dan Lungren of California, who said Friday that "it is undeniable that the American people are tired of the way Congress has conducted its business on their behalf."

Already gone will be the more accommodating Minority Whip Roy Blunt of Missouri and conference chairman Adam Putnam of Florida, who are expected to be replaced this week by Virginia's Eric Cantor and Indiana's Mike Pence. Pence, in a letter to colleagues announcing his intention to seek the conference chairmanship, pledged to "expose, dismantle and defeat the liberal Democratic agenda."

Democrats are likely to maintain much of their current team. Caucus Chairman Rahm Emanuel of Illinois will head to the Obama White House as chief of staff, and affable John Larson of Connecticut, considered a strong Pelosi ally, is in line to replace him. Rep. Xavier Bacerra of California is expected to become vice chairman.

The biggest struggle will involve chairmanship of the House Energy and Commerce Committee, where longtime gadfly Henry Waxman of California is challenging Michigan's John Dingell for stewardship of a powerful panel that is likely to consider President-elect Obama's initiatives on health care, global warming and regulatory reform.

On Monday, much of the Senate internal drama is expected to involve how Democrats deal with independent Joe Lieberman of Connecticut.

Lieberman, the party's 2000 vice presidential candidate, infuriated party members by supporting Republican John McCain for president and speaking at the GOP convention.

Now chairman of the Homeland Security and Governmental Affairs Committee, he is expected to be stripped of that post but allowed to stay in the caucus — but some Democrats are said to be opposing even allowing him to do that.

Lieberman has stayed mum about his intentions.

MORE FROM MCCLATCHY:

Can Congress save the U.S. auto industry?

Cut in worker benefits adds to economic turmoil

Treasury scraps original bailout plan as economy worsens

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