Speaker Nancy Pelosi, in a Saturday afternoon announcement, says the House plan would require existing funds from the $700 billion Troubled Asset Relief Program (TARP) to be used to help the auto industry, meaning no new money would be authorized by Congress under this plan.
The White House has resisted using existing TARP funds for the auto industry bailout, so any major accomplishments in next week's lame duck session are in serious doubt if Democrats can't strike a deal with the lame duck Bush administration.
Pelosi said the auto industry funds would come with many strings attached, including restructuring company finances, meeting new standards for gas mileage and requiring advanced technologies "to compete in the domestic and global market." The speaker's office offered no specifics about what the new fuel efficiency standards would be and what types of technologies would be required for the auto industry.
Democrats also said they would include new limits on executive pay at the Big Three auto companies, but offered no specifics on that idea either.
"Recognizing the severe challenges facing the domestic automobile industry, whose failure could jeopardize millions of jobs here at home and have a devastating impact on our economy, the House Democratic bill will provide immediate, targeted assistance to allow the car makers, together with affected unions, time to develop a plan to assure the long-term viability of the industry," Pelosi said Saturday in a statement.
The auto bailout is a remarkably scaled back proposal compared with the original plans for a major economic stimulus during this lame duck session of Congress. But Senate Republicans and the White House have both signaled that a major economic stimulus proposal was not going to make it out of Congress in the lame duck, so a larger proposal will have to be negotiated with the incoming Obama administration.
Pelosi can probably push the auto bailout through the House next week, but in the Senate, Majority Leader Harry Reid (D-Nev.) has some serious negotiating on his hands with Senate Republicans. And Reid is working with even less than his 51 seat Democratic majority next week thanks to Barack Obama and Joe Biden's promotions in the Nov. 4 election.