Senate Rejects Auto Bailout Despite Intense Negotiations
Democratic leaders and the White House made final pleas for the bill's passage on Thursday, but the two sides in the Senate failed to forge a compromise
Thursday, December 11, 2008
The White House said it was evaluating its options in light of the breakdown of a deal on $14 billion in aid to Detroit's Big Three automakers. The deal fell apart Thursday night in the Senate despite intense negotiations on Capitol Hill between lawmakers, union officials and representatives from the three companies.
"It's disappointing that Congress failed to act tonight," Deputy Press Secretary Tony Fratto said in a statement. "We think the legislation we negotiated provided an opportunity to use funds already appropriated for automakers and presented the best chance to avoid a disorderly bankruptcy while ensuring taxpayer funds only go to firms whose stakeholders were prepared to make difficult decisions to become viable."
The bailout died after failing 52-35 on a Senate procedural vote.
Earlier in the evening, the talks appeared to have produced a breakthrough, with Democratic leaders "hopeful" that an agreement had been reached that would be acceptable to Senate Republicans, who have resisted the aid package. But Senate Majority Leader Harry Reid came back later to report the effort had failed, adding he was "terribly disappointed."
Reid called the bill's collapse "a loss for the country," adding: "I dread looking at Wall Street tomorrow. It's not going to be a pleasant sight."
House Speaker Nancy Pelosi released a statement after the bill was blocked, saying: "Senate Republicans' refusal to support the bipartisan legislation passed by the House and negotiated in good faith with the White House, the Senate and the automakers is irresponsible, especially at a time of economic hardship. The consequences of the Senate Republicans' failure to act could be devastating to our economy, detrimental to workers, and destructive to the American automobile industry unless the president immediately directs Secretary Paulson to explore other short-term financial assistance options, including TARP and those available to the Federal Reserve....
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