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White House mulls Wall St fund as rescue option
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The White House said on Friday that it will consider using the Wall Street bailout fund to prevent the US auto industry from collapsing after the Senate refused to pass a rescue bill endorsed by President George Bush and congressional Democrats.
"The current weakened state of the economy is such that it could not withstand a body blow like a disorderly bankruptcy in the auto industry," White House press secretary Dana Perino said.
The Wall Street bailout fund is one of the few remaining options for General Motors Corp and Chrysler LLC, which have said they could run out of cash within weeks. Bush had originally refused to use the bailout fund to help the automakers, insisting that help come from Congress. But the White House said it must reconsider after the Senate failed to agree on a $14 billion rescue plan.
"Congress spoke last night.They don't have the votes to do anything,"Perino told reporters on Air Force One as Bush traveled to a commencement speech in Texas."They didn't get it over goal line and so we have to consider what other options we would take."She declined to say when a decision would be made.
About $15 billion from the first half of the $700 billion financial bailout remains uncommitted. Treasury in the past two months has pumped out about $335 billion to banks and insurance companies. To begin tapping the second half of the bailout, the administration would first have to notify Congress, which could block it or put new conditions on how the money is used.
The Senate's rejection of the $14 billion rescue plan and further evidence of a deepening global recession made world stock markets plunge. In Detroit, United Auto Workers president Ron Gettelfinger said he was confident that a solution to the auto industry's financial crisis will emerge in Washington despite the Senate's defeat of the bailout bill. AP
I hope we can find a way to help auto cos: Obama
US president-elect Barack Obama said on Friday that he was disappointed by the failure of a Senate deal to bail out the US auto industry and hoped that the government and Congress "will still find a way' to help the struggling car makers."The revival of our economy as a whole should not be a partisan issue,"Obama said."My hope is that the administration and the Congress will still find a way to give the industry the temporary assistance it needs while demanding the long-term restructuring that is absolutely required."
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