Washington - US president-elect Barack Obama Thursday called
on Congress to prevent a collapse of the country's automotive
industry, but Senate Republicans were gearing up to block a
legislative deal.
The House of Representatives approved a 14-billion-dollar
emergency loan for the car industry Wednesday night, imposing strict
oversight rules in exchange for keeping General Motors Corp and
Chrysler LLC out of bankruptcy at least until April.
But Republicans argue the legislation still provides the loan
without forcing tougher restructuring moves on the companies.
Obama, speaking at a Chicago press conference, said the automotive
bail-out was vital for the US economy and urged the Senate to follow
suit.
'At this moment of great challenge for our economy, we cannot
simply stand by and watch this industry collapse. Doing so would lead
to a devastating ripple effect throughout our economy,' said Obama,
who has not taken an active role in the congressional negotiations.
Passage appeared less likely in the closely-divided Senate,
Democrats hold only a 50-49 majority, and 60 votes will likely be
needed due to a procedural measure that can be used by opponents to
block legislation.
A vote could come as early as Thursday, but there may also be no
vote at all as Democratic and Republican leaders continued haggling
over the details.
Mitch McConnell, the top Republican in the chamber, came out in
opposition to the House legislation on Thursday, dealing a
significant blow to the bail-out's chances.
'We simply cannot ask the American taxpayer to subsidize failure,'
McConnell said in a speech before the Senate, criticizing the
legislature for being selective in its choice of which industries to
rescue.
'A lot of Americans are asking where their bail-out is. They
wonder why one business would get support over another,' he said.
The bill would create a White House-appointed 'car czar' who would
oversee the companies' restructuring and have the authority to revoke
the loan by March 31 if not enough progress was being made.
McConnell voiced support for an alternative proposal by Republican
Senator Bob Corker. Among other things, Corker would force carmakers
to immediately bring down labour costs to the level of Japanese
competitors operating in the US.
But Corker's is only one of a series of Republican approaches.
Senate Majority Leader Harry Reid, a Democrat, is pushing for
Republicans to agree on one alternative solution that could be put up
for a vote, according to Congressional Quarterly.
President George W Bush's administration backs the deal passed by
the House, but the outgoing president has limited clout with his
fellow-Republican legislators. White House press secretary Dana
Perino said Bush would be telephoning key Republican Senate leaders
throughout Thursday.
The carmakers have argued an emergency 'bridge loan' is needed to
weather the US recession, which has sent car sales to a 25-year low
in the past two months.
But many lawmakers blame the industry's struggles on a failure to
streamline production and cut costs over the past decade as foreign
competitors gained ground in the US market.
USA
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