Senate Republicans are saying: Not so fast. Or maybe, not at all.

The endless bailout saga continues. This time it is Republicans in the Senate who are seeking to block passage of the 14 billion US dollar bailout package that the House passed on Wednesday night. That package was agreed upon by Democratic leaders and the White House which would provide emergency bridge loans to General Motors and Chrysler in order for the two most desperate of the Big 3 automakers to avoid a collapse.

But with Democrats holding a tenuous 50-49 majority in the Senate, passage without at least some Republican support is almost impossible. Democrats would need a super majority of 60 seats in order to override any Republican blockage.

Senate Minority Leader, Mitch McConnell, Republican of Kentucky, said in a speech on the Senate floor, “a lot of struggling Americans are wondering where their bailout is.” McConnell is supporting an alternative bill, sponsored by Republican Senator Bob Corker of Tennessee, that requires immediate concessions by auto workers and debt holders as a pre-requisite for the low-interest loans being provided to automakers. Republicans are also weary of giving money to the struggling industry based on mere promises of reform. They want automakers to make commitments to restructuring before getting any help.

The Bush administration, having agreed on the plan with Congressional Democrats, is trying to convince Republicans to support it. But President Bush no longer holds much sway with lawmakers of his own party.

Popularity: 1% [?]

WASHINGTON (CNN) — The Bush administration will consider other options, if necessary, to prevent a collapse of troubled automakers Chrysler and General Motors, a White House spokeswoman said Friday, one day after the Senate failed to reach a compromise on a bailout plan.

“Under normal economic conditions we would prefer that markets determine the ultimate fate of private firms,” Dana Perino said in a written statement.

“However, given the current weakened state of the U.S. economy, we will consider other options if necessary - including use of the TARP program (Troubled Asset Relief Program) — to prevent a collapse of troubled automakers.

“A precipitous collapse of this industry would have a severe impact on our economy, and it would be irresponsible to further weaken and destabilize our economy at this time.”

“It is disappointing that while appropriate and effective legislation to assist and restructure troubled automakers received majority support in both houses, Congress nevertheless failed to pass final legislation.

“The approach in that legislation provided an opportunity to use funds already appropriated for automakers, and presented the best chance to avoid a disorderly bankruptcy while ensuring taxpayer funds go only to firms whose stakeholders were prepared to make the difficult decisions to become viable, competitive firms in the future.

“While the federal government may need to step in to prevent an immediate failure, the auto companies, their labor unions, and all other stakeholders must be prepared to make the meaningful concessions necessary to become viable,” the statement said.

Continued

Popularity: 1% [?]

CNBC is reporting that four U.S. senators have reached a bipartisan agreement on a bill to help the Big 3 automakers in Detroit. Those senators include Michigan Democrats Carl Levin and Debbie Stabenow, Ohio Republican George Voinovich and Missouri Republican Christopher Bond. Details of the bill are not yet available, but a news conference is scheduled for 2:30PM EST, at which time we should learn more. It will likely be some compromise between the Democrats’ wish for taking an extra $25 billion out of the $700 billion financial bailout fund and the plan supported by the White House that would allow automakers to use the already approved $25 billion in low interest loans for anything they wanted rather than just investing in green technology.

Still, CNBC says the bill faces some big procedural hurdles, not the least of which is that senators want to go home soon for the Thanksgiving holiday. Trying to squeak in a vote before the break will be tough, and lawmakers may have to reconvene in December to vote on the bill. Plus, there’s no guarantee the House of Representatives will pass it even if the Senate would.

Regardless, Wall Street seems pleased with the news as shares of General Motors and Ford have jumped, with the latter hitting as high as $4 after ending the day yesterday at $2.79.

Popularity: 1% [?]