Weary Democratic congressional leaders and White House officials agreed in principle on a $15 billion bailout of US automakers that would give the government extraordinary power to restructure the failing industry. But the rescue faced snags as Republican lawmakers raised deep concerns.
Congressional aides and a senior administration official said the proposed deal would speed the loans to Detroit's struggling car companies and place a "car czar" named by President George W Bush in charge of overhauling the auto industry. Congress could vote on the plan as early as today and the money could be disbursed within days.
A breakthrough came when negotiators reached a compromise to require the czar to revoke the loans and deny any further federal aid to automakers that do not strike a deal with labor unions, creditors and others to ensure their survival by next spring -- essentially pushing them into bankruptcy.
"A great deal of progress has been made on auto legislation that will protect the taxpayer and ensure that short-term financing is available only to companies prepared to undertake the dramatic restructuring necessary to become viable and competitive," Dana Perino, the White House press secretary, said late yesterday.
Earlier in the day, Democratic Rep Barney Frank, the Financial Services Committee chairman, said the remaining issues were minor.
"There do not appear to me to be differences in principle of a sufficient nature to blow this thing up," said Frank, whose staff is helping to draft the bill.
