Speaker Nancy Pelosi (D-Calif.) and Senate Majority Leader Harry Reid (D-Nev.) are urging Treasury Secretary Henry Paulson to use his authority under the $700 billion Wall Street bailout package to help beleagured U.S. automakers.
General Motors, the largest of the Big Three auto companies, reported this week that it faces a dangerous cash crunch and could run out of money next year. With sales slumping, the auto industry and its allies in Congress are calling for as much as $50 billion in new government loans to help the struggling companies, on top of $25 bilion already approved.
In their letter to Paulson today, Pelosi and Reid asked him to review whether the Big Three — GM, Ford and Chrysler — could qualify for federal help under the $700 billion Wall Street bailout package.
"We are writing to request that you review the feasibility of invoking the authority Congress provided you under the Emergency Economic Stabilization Act of 2008 (EESA) for the purpose of providing temporary assistance to the automobile industry during the current financial crisis," Pelosi and Reid wrote.
"Under EESA, Congress granted you broad discretion to purchase, or make commitments to purchase, financial instruments you determine necessary to restore financial market stability. A healthy automobile manufacturing sector is essential to the restoration of financial market stability, the overall health of our economy, and the livelihood of the automobile sector's workforce."
Pelosi and Reid met with top auto industry executives on Thursday, and they told Paulson that they "left the meetings convinced that our nation's automobile industry — the heart of our manufacturing sector — and the jobs of tens of thousands of American workers are at risk."
The Treasury Department had no immediate comment on the Pelosi-Reid request.
President-elect Barack Obama told reporters on Friday, during his first press conference since winning the presidential race, that he was very concerned about the financial outlook for the auto industry as well. Obama said that he had "made it a high priority for my transition team to work on additional policy options to help the auto industry adjust, weather the financial crisis and succeed in producing fuel-efficient cars here in the United States. I have asked my team to explore what we can do under current law and whether additional legislation will be needed for this purpose."