Inching Toward a Bailout Deal for GM and Chrysler

As talks continue over whether the government should rescue the auto industry, disputes persist between congressional Democrats and the White House—but Washington is closer to granting the "Big Three" a bailout than it has been in weeks.

Under the Democrats' plan, the automakers would receive $15 billion in loans. The first loans would go to General Motors and Chrysler, which said last week that they'll need about that amount to survive into 2009. Ford has said it doesn't require short-term cash assistance.

According to the plan, President Bush would appoint a "car czar" to disburse the loans and oversee the companies' restructuring. The appointee, whom House Speaker Nancy Pelosi said this morning she hoped President-elect Barack Obama and Bush could agree upon so the new president wouldn't have to make a new appointment, could even force the corporations into bankruptcy if they aren't doing enough.

Given the extent of federal oversight implied, the bill comes close to nationalization. But against the fears of a deepening recession, there seems to be relatively little protest.

When the bill reached the White House last night, however, there were several objections to the proposal. One aspect the administration was wary of was the requirement that the companies tell Washington about any transaction over $25 million.

Still, Deputy White House Press Secretary Tony Fratto told the Associated Press today, "We made progress and hope to continue making progress." A vote on the bill could come as early as Wednesday.

The loans add up to far less than the $34 billion the automakers originally sought. But the fact that any loans are likely at all at this point, after the debacle of the congressional hearings, seems surprising. The change of heart stems partly from last week's news that a record 533,000 jobs were lost in November. 

• Read more on why Congress might bail out the Big Three after all