WASHINGTON — Congressional Democrats and the White House worked Monday to resolve terms of a $15-billion bailout for U.S. automakers — complete with a "car czar" to oversee the industry's reinvention — that's expected to come to a vote as early as Wednesday.
Top Democrats gave the White House their proposal for rushing short-term loans to Detroit's Big Three through a plan that requires that the industry remake itself in order to survive. The Bush administration gave a cool response initially, saying the measure didn't do enough to ensure that only viable companies would get longer-term federal help.
Negotiators worked into the night Monday to resolve differences.
House Speaker Nancy Pelosi said she hoped that President Bush's appointee as car czar would not need to be replaced by President-elect Obama, raising the prospect that the outgoing and incoming administrations would cooperate in selecting someone.
The president's designee would disburse the short-term emergency loans to General Motors Corp. and Chrysler LLC, which are at risk of financial collapse, and would directly supervise the reorganization plans that the auto manufacturers have agreed to carry out in exchange for government aid.
Ford Motor Co. said it would not seek short-term federal aid, saying it does not face the same "near-term liquidity issue" as GM and Chrysler.
The progress in the talks helped lift the stock markets, which also benefited from strong rallies in Europe and Asia. The Dow Jones Industrial Average climbed 3.5 percent, or nearly 300 points, to close at 8,934.18.
Shares of General Motors closed up 21 percent, while Ford's rose 24 percent. Chrysler is not a publicly traded company.
Bush said it was "hard to tell" if a deal was imminent because definite conditions had to be met. "These are important companies, but on the other hand, we just don't want to put good money after bad," he said on ABC's Nightline.
Officials declined to speculate who might fill the role of car czar, but the Democrats' legislation called for "one or more officers from the executive branch with appropriate expertise in such areas as economic stabilization, financial aid to commerce and industry, financial restructuring, energy efficiency and environmental protection." The car czar could revoke the loans if the carmakers weren't taking sufficient steps to reinvent themselves.
By Jan. 1, according to the draft bill, the car czar would be required to develop benchmarks for assessing the automakers' progress in carrying out the restructuring plans. The car czar would also have the power to convene meetings of an array of stakeholders in the auto companies including unions, creditors, suppliers, auto dealers and shareholders.
Despite optimism on both sides that Congress and the White House could reach a swift agreement on the measure, it was still a tough sell on Capitol Hill. Sen. Carl Levin, D-Mich., a key ally of the auto industry, said getting the roughly 15 Republicans needed to support the plan was an uphill battle.
Even sympathetic Republicans weren't ready to sign on. Sen. George Voinovich, R-Ohio, has "numerous concerns" about the bill, including the strength of the taxpayer protections and the role of the car czar, said spokesman Chris Paulitz.
The crux of the White House's concern is that there may not be enough clear, immediate protection for taxpayers if a company is not meeting its own promises for long-term viability after review by the president's overseer. The latest proposal suggested Congress may have to get involved again in a few months and pass a law to force a company to stick to its own plan — a potentially unwieldy political step.
Rep. Barney Frank, D-Mass., the House financial committee chairman who is leading negotiations, said he was optimistic the differences could be resolved.
Democrats are pressing to allow the president to choose other people beside the czar to help oversee the bailout, while the White House wants just one person tapped by Bush to have control.
Congressional Republicans and the White House also are balking at a requirement Democrats included in their proposal that the carmakers drop their opposition to efforts by California and several other states to impose stricter emissions rules than the federal standard.