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On-the-Scene: What’s Next for the Auto Industry?

By Rich Edson, FOX News correspondent

U.S. Automakers say they need cash.  Now Washington is fighting over how best to provide assistance, or whether to at all.

“So there’s a basic credit crunch here,” said Rep. Sandy Levin, a Democrat from Michigan.  “And what the domestic auto companies need is a bridge, a bridge to the future. This isn’t a bailout, it’s a bridge.”

That bridge could be constructed by allowing General Motors, Ford and Chrysler to apply for money through the $700 billion rescue package.  Congressional Democrats say they will attempt to amend that law next week to let U.S. automakers borrow billions of taxpayer dollars.

“I am confident Congress can consider emergency assistance legislation next week during a lame-duck session,” said House Speaker Nancy Pelosi in a written statement.  “I hope the Bush Administration would support it.”

Though the Bush Administration has failed to embrace that idea, saying that is not the intent of the rescue plan.

“We need a solution, but the solution has got to be one that leads to viability,” said Treasury Secretary Henry Paulson of the auto industry.

“We’re open to ideas from Congress to accelerate funds they’ve already appropriated in the auto loan program, as long as funding will continue to go to viable firms and with strong taxpayer protections,” said White House Deputy Press Secretary Tony Fratto.  “Remember that Congress specifically created this program to help automakers.”

Congress has already appropriated $25 billion in loans for U.S. automakers to upgrade their factories to churn out more fuel-efficient cars.  Auto industry advocates say the application process is lengthy, and that it is impossible for companies to participate if they do not use the money to help meet fuel-efficiency standards.

President – Elect Barack Obama has indicated his support for the auto industry.  It may be left to his administration.

 

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