The Bush administration could act as early as today to approve an automaker bailout from its bank rescue fund, with conditions likely to reflect at least those approved by the US House of Representatives last week, key lawmakers and other sources said on Monday (local time).
A Treasury Department official said the agency and auto company executives continued to review financial and other information, and that no decision had been made. The White House is actively involved in the matter, officials said.
House Speaker Nancy Pelosi, a California Democrat, says the administration will likely use part of the $700 billion fund established in October to stabilize the financial services sector, rather than pushing the companies into bankruptcy, as some lawmakers have urged.
General Motors Corp and Chrysler LLC, which is owned by Cerberus Capital Management, have said they need immediate injections of cash to avoid near-term collapse.
Ford Motor Co is seeking a government line of credit to be used if its financial conditions deteriorate more than expected in 2009.
Auto sales have plummeted amid a global economic slump, worsening an already bad financial situation in Detroit.
The companies and other bailout proponents say a rescue is necessary to avoid massive job losses during a recession.
Democratic Senator Carl Levin of Michigan, who helped spearhead a $14 billion rescue proposal that failed in the Senate last week, said he expects help for both GM and Chrysler to come from the bank rescue fund and suggested GM could receive about $8 billion.
The company has said it needs $10 billion to carry it through March.
The US Treasury has committed all but $15 billion from the initial pool of capital in the financial bailout account.
Levin and two other people familiar with the administration's thinking said they believe a decision will be made as early as today.
Levin said he expected conditions would be similar to those in the bill backed by Democrats and the White House and approved by the House last Wednesday, which was opposed by Senate Republicans.
There could be additional provisions relating to equity that would go to the government in return for assistance, Levin said.
"The president made a deal with the House of Representatives. It passed the House and once the president makes a deal, he's not likely to walk away from it," he said.
Source:China Daily/Agencies
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