Harry Stoffer
Automotive News
WASHINGTON -- The Bush administration, signaling a possible shift in policy, will consider using money set aside for the rescue of financial institutions to make emergency loans to automakers, the White House said this morning.
The word comes in the aftermath of stunning rejection by the Senate last night of legislation to provide $14 billion in emergency loans to prevent the collapse of General Motors and Chrysler LLC.
President Bush and his appointees have resisted using any of $700 billion approved in October for financial institutions to provide industry help under the Troubled Asset Relief Program, or TARP. Democrats contend the failure of one or more automakers would have widespread devastating economic effects.
It's unclear when the White House or U.S. Treasury will make a decision about using TARP funds for the auto bailout.
Of the first $350 billion in the TARP fund, about $15 billion has not yet been committed, wire services reported this morning.
That happens to be the amount GM and Chrysler say they need to survive to the end of the first quarter of 2009.
To access the second $350 billion, the administration must seek fresh approval from Congress.
U.S. Sen. Carl Levin, D-Mich., said the effort to provide the emergency bridge loans remains "very much alive."
"I am encouraged that the White House said today that they will consider other options to assist the auto companies, including use of the TARP program," Levin said in a statement.
"Use of TARP funds is the fastest, most feasible, most immediate and most certain approach to provide the emergency bridge loans needed by the auto companies....More
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