Politics & Government

McConnell expects contentious debate over carmakers' aid

WASHINGTON — Senate Minority Leader Mitch McConnell is bracing for a contentious debate over a government rescue of the nation's struggling automotive industry when the Senate reconvenes for a lame-duck session next week.

Much of the opposition will come from leaders of his own party, as top Republicans such as Alabama Sen. Richard Shelby, the ranking member on the Banking Committee, question whether the Big Three automakers' woes are related to the sharp economic downturn or to problems within the industry.

Meanwhile, Democratic leaders are pressuring McConnell to garner support from his caucus for a package designed as an extension of unemployment insurance and aid to the domestic auto industry.

"Based on our conversation earlier this week, however, I understand that you currently oppose such a package and that Senate Republicans are prepared and able to block such legislation," Senate Majority Leader Harry Reid wrote McConnell on Friday. "This is disappointing, and I hope you will reconsider."

McConnell, whose home state is the third largest producer of autos, brushed the criticism aside.

"Senator Reid has not yet provided us with the text of his proposed spending bill, or the cost to the taxpayer, or its impact on the deficit. So it would be a real challenge to promise any level of support or opposition sight unseen," McConnell said in a written statement. "And while Sen. Reid's public comments referenced our private conversation on the level of support for his yet unwritten bill, we don't yet know if there is even sufficient support from within his own ranks."

McConnell's position is further complicated by strong support for the rescue package within Kentucky, which has two Ford plants, a Toyota factory and a GM plant. The state trails only Michigan and Ohio in the number of autos produced.

McConnell supports giving automakers $25 billion in loans approved earlier this fall, but he has steered clear of discussions on using a portion of the $700 billion rescue package for the country's foundering financial sector to bail out the automotive industry.

"It may be that there are changes that need to be made in order to expedite these low-interest loans," said Don Stewart, a spokesman for McConnell. "Other ideas have been floated, and all will receive a review as we approach the Senate's return next week."

In step with McConnell, the White House on Friday threw its support behind a plan to speed release of $25 billion in existing loans to the Big Three automakers but rejected the Democratic proposal to use money from the financial industry bailout plan.

The previously approved loans were meant to help automakers build more fuel-efficient vehicles and become more competitive companies in the global marketplace. The administration now supports allowing the loans to be released more quickly than the original legislation prescribed and to be used for more urgent purposes as the companies struggle to stay afloat.

"Democrats are choosing a path that would only lead to partisan gridlock," said White House spokeswoman Dana Perino. "We are now actively calling on Congress to amend the loan program."

Read the full story at kentucky.com.