Lawmakers on Friday turned their attention to passing a bailout package for ailing U.S. automakers as a disastrous unemployment report graphically reminded them what's at stake if the Detroit Three were allowed to collapse, marketwatch reported.
Top Democrats in the Senate and House have said Congress may consider legislation next week to provide financial assistance to the ailing automakers, but there are no definite plans yet. Senate Majority Leader Harry Reid, D-Nev., and House Financial Services Chairman Barney Frank, D-Mass., have bills ready to debate.
In a statement Friday, Reid called on Congress to take action to keep the auto makers solvent while ensuring "strong oversight" of the industry.
House Speaker Nancy Pelosi, D-Calif., and Reid were reportedly polling colleagues to determine whether Congress has the political will to rescue General Motors Corp., Ford Motor Co. and Chrysler.
Rep. Steny Hoyer (D-Md.) said late Friday the House will reconvene on Tuesday. "However, whether the House will consider legislation affecting the U.S. automotive industry or any other economic recovery legislation has not yet been determined," he said.
"We will continue to discuss with President Bush and our Republican colleagues how we can take action to address the economic crisis facing millions of American families," he added.
The maneuvering follows a second day of Capitol Hill hearings during which chief executives for the three struggling car companies again pitched for $34 billion in government loans before the House Financial Services Committee.
The three executives, joined by United Auto Workers President Ron Gettelfinger, have built their request for money around warnings of the dire consequences a bankruptcy by any of the Big Three would have on the economy as it ripples through the industry and its suppliers.
"I hope we will do something because I think for us to do nothing, to allow bankruptcies and failures in one, two or three of these companies in the midst of the worst credit crisis and the worst unemployment situation that we've had in 70 years would be a disaster," Committee Chairman Barney Frank, D-Mass., said in opening remarks.
And time is apparently running out. Two weeks ago, when the three carmakers first approached Washington for a bailout, they collectively requested $25 billion. That number has since ballooned to $34 billion, and economists warn that could be just the tip of the iceberg.
Preparing for possible financial failure, Chrysler LLC hired prominent law firm Jones Day to serve as its bankruptcy counsel several weeks ago, just in case its bid for federal funds proves unsuccessful and it cannot secure financing elsewhere, The Wall Street Journal reported Friday on its Web site, citing people familiar with the matter.
While lawmakers remain skeptical that granting the companies federal loans would be a responsible use of taxpayer money, they understand the stakes are high in an economy already reeling.
In a repeat of Thursday's Senate hearing, House Financial Services Committee members launched into a spirited grilling of the executives, questioning their ability to rebuild themselves and repay any federal money extended to them.