White House, Congress on separate paths to help auto industry

White House, Congress on separate paths to help auto industryWashington  - The White House and Congressional Democrats agreed Monday that something must be done to rescue the US automotive industry, but they were far apart on how to get there.

Congressional Democrats appeared intent on taking 25 billion dollars from the 700-billion-dollar emergency bail-out legislation to help the industry, and were formulating further legislation expected to be introduced later Monday.

But Republicans and the White House have signalled their opposition, and want Congress to pursue a different avenue to find a loan under Department of Energy legislation.

"Once you start down that road" of opening the 700-billion-dollar fund for individual industries, "it's a slippery slope to other industries that might say that they need help," said White House spokeswoman Dana Perino.

Senate Majority Leader Harry Reid expressed his annoyance with US Treasury Secretary Henry Paulson, who last week refused to include an auto industry bail-out in the
700-billion-dollar package.

"All it would take is one stroke of the pen," Reid said in broadcast remarks.

In an unusual move, Congress has reconvened after the November 4 presidential elections, despite its lame duck status until January, when the newly-elected Congress and president-elect Barack Obama take office.

The crisis in the auto industry was a compelling factor in reconvening.

The auto industry has already seen 25 billion dollars approved to develop emissions-friendly technology, and Congressional leaders want to find another 25 billion dollars for them by year's end.

US auto sales plummeted 32 per cent in October to the lowest monthly total since 1991 as the industry continued to lose cash and shed jobs.

Some critics believe the auto industry should be allowed to go bankrupt so it can change its ways of mismanagement and resistance to reducing auto emissions by improving efficiency.

In an interview with CBS broadcast Sunday, Obama suggested that under "normal circumstances" that might not be a bad idea.

But given the current financial turmoil, he added: "For the auto industry to completely collapse would be a disaster in this kind of environment. So it's my belief that we need to provide assistance to the auto industry. But I think that it can't be a blank cheque." (dpa)

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