Bush team ponders emergency industry aid, lawmakers say

WASHINGTON -- Bush administration officials and automakers are working this weekend on a possible deal for emergency loans to prevent the collapse of General Motors and Chrysler LLC, says a senator close to the situation. 

Sen. Bob Corker, R-Tenn., said the Treasury Department is going over the companies?nbsp;balance sheets and talking with the automakers. 

The White House reversed course on Friday and said it is willing to consider emergency loans for automakers, using part of $700 billion approved in October to rescue financial institutions. The administration adamantly opposed that course until Congress failed Thursday to provide $14 billion to GM and Chrysler, using other funds. 

Sen. Carl Levin, D-Mich., said today that administration action is now "very likely." He appeared on CBS’s "Face the Nation." 

Corker, on "Fox News Sunday" and "Face the Nation," said he is encouraging the administration to impose conditions on loans for automakers like those he offered in Senate legislation last week. "They don’t have to negotiate," Corker said of administration officials. 

Corker’s plan would require an automaker to get creditors to exchange at least two-thirds of their debt for equity in the company. It also would enable an automaker to use stock instead of cash for at least half of its required payment to a trust fund for retired worker health care. And it would require Detroit 3 workers to accept wages, benefits and work rules comparable to those at import-brand plants in 2009. 

Corker tried to attach his plan to the Senate version of an aid bill that had been negotiated by the White House and congressional Democratic leaders. The House approved the measure Wednesday. 

But closed-door talks broke down, and the Senate mustered only 53 votes to move ahead with the bill from the White House and Democratic leaders. Sixty votes were needed.  

Much of the discussion on Sunday TV news programs was about fixing blame for the breakdown in the Senate. Corker said that UAW President Ron Gettelfinger scuttled the deal because "he knew the White House would bail them out." 

Gettelfinger, on CNN’s "Late Edition," said Corker is "stretching the truth" about why legislation failed, and he now believes that the UAW should not have tried to make an agreement with the Republican senator because "he could not deliver." 

Nevertheless, Gettelfinger said, he too is optimistic about action by the administration because the White House has been honest in negotiations and President Bush "recognizes the importance of the industry." 

Sen. Debbie Stabenow, D-Mich., also on Fox News Sunday, said Senate Republican leaders were at fault for wanting workers to be the only ones making concessions before loans were approved. 

She said she welcomes White House action, using the financial rescue funds, and doesn’t oppose conditions "as long as everyone is at the table, equally."