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US rescue package for automakers floundering

Source: PTI
November 14, 2008 12:47 IST
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A governmental rescue package for the US automakers seems to be floundering as Democratic Congressional leaders concede that they would face potentially insurmountable Republican opposition during a lame-duck session for the passage of the bill next week.

At the same time, hope among many Democrats on Capitol Hill for an aggressive economic stimulus measure all but evaporated, the New York Times reported.

Democratic leaders have been calling for a package that would include help for the auto companies as well as new spending on public works projects, an extension of jobless benefits, increased food stamps and aid to states for rising Medicaid expenses.

The Times quoted Democrats as saying the stimulus measure would wait until President-elect Barack Obama takes office in January.

But, the paper said, some industry experts fear that one of the Big Three automakers will collapse before that, with potentially devastating consequences.

Despite hardening opposition at the White House and among Republicans on Capitol Hill, the Democrats were quoted as saying they would press ahead with efforts to provide $25 billion in emergency aid for the automakers.

But they said the bill would need to be approved first in the Senate, which some Democrats said was highly unlikely.

The White House, in resisting calls for aiding the automakers, has also warned repeatedly against throwing taxpayer money at companies that may not be salvageable, the paper said.

Passing any legislation to aid the auto companies would require 60 votes in the Senate. Democrats now control 51 of those votes but Obama has said he will resign his Senate seat on Sunday and Vice President-elect Joseph R Biden Junior is not expected to attend the session, meaning Democrats would need the support of at least 11 Republicans, the Times noted.

With Bush still wielding his veto authority, the fate of any legislation without White House support would be uncertain.

The auto companies, however, remained hopeful and said they would send top executives to Congressional hearings next week to make their case, it added.
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