Congress, White House near deal for US$15 billion auto bailout

WEARY Democratic congressional leaders and White House officials pushed to clear the final obstacles to a US$15 billion bailout of US automakers last night, but the rescue plan faced new snags as Republicans raised deep problems.

Top Democrats said they were still hopeful of a deal by today, with a final vote to follow by the end of the week, although sticking points remained regarding the package, which would place a "car czar" named by President George W. Bush in charge of an auto industry restructuring in return for emergency government loans.

"We've had very productive discussions about legislation consistent with the president's principles," said Joel Kaplan, Bush's domestic policy adviser, as he emerged from an evening meeting with congressional aides where they were working on legislative language.

The White House also was demanding, so far unsuccessfully, that Democrats scrap language that would force the carmakers to drop lawsuits challenging tough emissions limits in California and other states.

That measure "kills the deal," said Dan Meyer, Bush's top lobbyist. He said agreement was within reach but not completed.

"We're close," Meyer said. "It's not locked down."

Another remaining hang-up was over ensuring that Cerberus, the private equity firm that owns Chrysler LLC, would reimburse the government should the auto company default on its loan, said a congressional negotiator who spoke on condition of anonymity because he was not authorized to disclose details of the emerging deal.

Leading Democrats voiced optimism that a deal would be reached.

"There do not appear to me to be differences in principle of a sufficient nature to blow this thing up," Democratic Rep. Barney Frank told reporters. Frank is chairman of the Financial Services Committee of the House of Representatives. Earlier, he privately briefed House Democrats on the emerging deal and expected agreement by day's end.