December 16, 2008

White House working on auto bailout

The White House and U.S. Treasury are reviewing options for helping struggling automakers, although options have narrowed, House Speaker Nancy Pelosi said.

TARP funds are the only recourse they have, Pelosi said.

The options narrowed after the Senate rejected a separate $14 billion emergency loan package last week. White House and Treasury officials are now considering our policy options, White House spokesman Tony Fratto said Monday.

President George Bush, aboard Air Force One, told reporters a deal would be forthcoming, but Treasury spokeswoman Brookly McLaughlin said Monday no decision had been made.

It is likely help would come with terms similar to the bill considered by Congress with mandates the industry renegotiate debt and seek concessions from union workers, the Detroit Free Press said.

One at-large issue is the option of bankruptcy. Chrysler has said bankruptcy would still be costly, requiring $20 billion to see it through 2009.

I think all the signals coming from the White House are that they know bankruptcy is not an option, Pelosi said Monday.