U.S. Senate Approves $25B in Loans to Automakers

(MoneyWatch)  The U.S. Senate in an unusual Saturday session today approved an omnibus spending bill that included funding for $25 billion in loans to U.S. automakers, to help pay for development of more fuel-efficient vehicles.

"At a critical time in our nation's economy, these loans to our auto industry will help create good-paying jobs right here at home," said Sen. Debbie Stabenow (D-Mich.), in a written statement after the Senate bill passed.

The U.S. House of Representatives passed its version of the bill on Sept. 24. President Bush is expected to add his approval in short order.

Predictably, Michigan's other senator, Carl Levin, another Democrat, also supported the loans. "American auto companies are facing huge challenges. They are facing a sputtering global economy; the economic downturn and credit market crisis here at home; and the new fuel economy standards that Congress enacted last year," he said in a written statement earlier this week. Congress approved the loans last year, at the same time it hiked gas-mileage requirements to a Corporate Average Fuel Economy of 35 mpg, an increase of more than 50 percent from the current level. However, Congress didn't approve money for the loans until today. In the meantime, automakers are scraping for every mile per gallon.

Stabenow said the Department of Treasury will provide the $25 billion, in low-interest loans to American automakers, to finance the retooling of existing manufacturing facilities. Stabenow said that since 2001, over 3.8 million U.S. manufacturing jobs have been lost.

Michigan has lost over 278,000 manufacturing jobs in that same period, she said, as the state unemployment rate has climbed from 4.7 percent to 8.9 percent.