The prospects of a government rescue for the nation’s foundering automakers dwindled Thursday as Democratic congressional leaders conceded that they would face potentially insurmountable Republican opposition during a lame-duck legislative session next week.
At the same time, hope among many Democrats on Capitol Hill for an aggressive economic stimulus measure all but evaporated. Democratic leaders have been calling for a package that would include help for the auto companies as well as new spending on public works projects, an extension of unemployment benefits, increased food stamps and aid to states for rising Medicaid expenses.
But while Democrats said the stimulus measure would wait until President-elect Barack Obama takes office in January, some industry experts fear that one or more of the Big Three automakers will collapse before then, with potentially devastating consequences.
Despite hardening opposition at the White House and among Republicans on Capitol Hill, the Democrats said they would press ahead with efforts to provide $25 billion in emergency aid for the automakers. But they said the bill would need to be approved first in the Senate, which some Democrats said was highly unlikely.
Sen. Christopher J. Dodd, D-Conn., the chairman of the banking committee, said he did not believe there would be sufficient Republican support to get the 60 votes needed to move a bill forward. “Right now, I don’t think there are the votes,” he said, adding that he personally favored aid for the automakers.
As the outlook for an auto industry bailout dimmed, President George W. Bush traveled to Wall Street, where he gave a robust defense of capitalism and seemed to warn world leaders — and the incoming Obama administration — not to draw the wrong lessons from the global economic crisis by over-regulating markets and hindering free trade.
The White House, in resisting calls for aiding the automakers, has also warned repeatedly about not throwing taxpayer money at companies that may not be salvageable.
Acknowledging the Bush administration’s opposition, Dodd said Democrats had to keep in mind that the Treasury Department already has some authority to help the finance arms of the auto companies but has been reluctant to use it.