Prospects for Auto Industry Bailout Dims

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Congress went back to work, Monday, with big plans to push a second economic stimulus package, but with dimming prospects for a bailout of the auto industry.

As the Senate reconvened for the lame-duck session, many Republicans voiced objections to the bailout, arguing that the troubled auto giants GM, Ford, and Chrysler don't have plans in place to reform their failing businesses.

President-elect Obama said he agrees that the struggling auto industry should not be ignored, but that the government can't just give the companies a blank check.

"For the auto industry to completely collapse would be a disaster in this kind of environment," Obama said in a "60 Minutes" interview Sunday. "My hope is that over the course of the next week... the discussions are shaped around providing assistance, but making sure that that assistance is conditioned on labor, management, suppliers, lenders, all of the stakeholders coming together with a plan."

Click play for more analysis in a CBN News interview with Andrew Grossman of the Heritage Foundation.

Sales for the "Big Three" have faltered amid the current credit crisis and Democrats say too many jobs are now on the line.

"Six million jobs are at stake in the American car industry," Maryland Sen. Barb Mikulski said. "One out of 10 jobs in America rely on the auto industry."

A Vote by Wednesday?

Senate Majority Leader Harry Reid will hold a test vote this week on a broader economic aid plan that does not include extra money for automakers. If it fails, he said he will seek a vote on the auto industry bailout and the unemployment benefits.

"If we move forward, we can protect and create American jobs, help working families and prevent our economy from falling even further into recession," Reid said. He said he hopes the votes will come by Wednesday.

"I ask my colleagues to show the American people that in the face of tremendous economic pain and uncertainty, we will not wait until January," Reid added.

Meanwhile, The White House clarified its opposition to the automaker bailout.

Press secretary Dana Perino said the administration "does not want U.S. automakers to fail," but that they do not support automakers getting an additional $25 billion in government aid from the $700 billion plan passed by Congress in October.

She said that that rescue program "was never intended by Congress to assist automakers or other sectors of the economy. It was solely intended to deal with what is an ongoing credit crisis in our financial sector."

Democrats also said that if a new stimulus package faced too much opposition, they'd give it up for now. In it's place, they'd ask for extra unemployment benefits and $25 billion to help ailing automakers.

Source: The Associated Press

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