After weeks of tense discussions with the heads of the U.S. auto industry, Democratic Congressional leaders have reached an agreement that may just clear the way for the Big Three to get the money they need to survive ... for now.
CBS News correspondent Kimberly Dozier reports that significant progress came Friday night, when Democrats from both the House and Senate agreed to bail out the struggling General Motors, Chrysler and Ford with federal funds.
Several officials say the White House and congressional Democrats have agreed on $15 billion in loans, which is less than half of what the car chiefs were seeking.
They say the breakthrough came after House Speaker Nancy Pelosi bowed to a demand by President Bush that any aid come from a fund that had been intended to help Detroit produce more fuel-efficient cars.
Pelosi said the House would consider legislation next week to provide "short-term and limited assistance" to the U.S. auto industry.
The agreement came after another round of confrontational hearings, pitting exasperated lawmakers against desperate corporate heads.
Facing the automakers who returned to Capitol Hill seeking money, Rep. Jeb Hensarling, R-Tex., said, "Can you name me three industries in this economy that aren't hurting that couldn't use $34 billion? Name one that couldn't use it."
The bosses of Chrysler, Ford and GM say bankruptcy just is not an option.
"It's going to cream our revenues, said GM CEO Rick Wagoner. "And if our revenues go down like this, we will never be able to cut costs enough to get ahead of that."
As executives from Detroit pleaded with lawmakers for loans to help them survive, the government reported- 533,000 jobs gone in November - and an unemployment rate of 6.7%.
Officials in both parties said the legislation would include creation of a trustee or group of industry overseers to make sure the bailout funds were used to transform General Motors, Ford and Chrysler into competitive enterprises.
Democratic leaders insist this money is a loan, not a gift.
"We are writing a bill whereby the federal government will be the first to be repaid when there is some money," said Rep. Barney Frank, D-Mass.
Meanwhile, while the White House had opposed any money to the automakers to come from the $700 billion bailout package that Congress had previously assigned to the Treasury Department to assist financial institutions, President George W Bush warned that at least one of the Big Three carmakers might not survive the current economic crisis and said action must be taken next week.
Although the deal is done in principle, there are several details to be ironed out. Even last night, the reported amount of the bailout changed, by the hour, by billions of dollars.
Staffers are expected to continue meeting throughout the weekend, and the vote is expected next week.
As carmakers made their plea to Washington for a $35 billion bailout package, GM announced it will cut shifts at factories in Ohio, Michigan and Ontario in February as a result of slumping car sales.
About 2,000 jobs were involved, bringing GM's year's total of layoffs to 11,000.
Smaller players warned that if Congress didn't help the Big Three, the ripple effect could affect the entire car industry.
Paul DiMaggio, the CEO and President of Delaware Valley Corp in Lawrence, Massachusetts, warned on Friday that the "trickle down effect" would be "phenomenal" if Congress rejected a bailout.
His company, which supplies material that is used in General Motors car doors and carpet, has already felt the effects of the car makers' troubles.
Just this week he was forced to lay off three members of staff, because the plants they supply material to have been forced to shut down.
"I have looked at it, we will survive and I hope I am not convincing myself overly optimistically that we will survive," DiMaggio said.
Azure Dynamics in Woburn, Massachusetts is another example of a company feeling the effects of the car industry's uncertainty.
The company, which has 120 employees, works on parts that fit into Ford's new hybrid energy vehicles.
Vice President Dean McGrew said on Friday that his company had seen a dramatic drop-off in demand in the past two months partially because of a drop in oil prices.