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No deal yet on auto rescue plan: White House

business Updated: Dec 09, 2008 09:29 IST

The White House said on Monday that there was no deal yet on an emergency rescue plan for troubled US automakers, amid a dispute with the US Congress on the firms' long-term plans for survival.

"We're reviewing draft legislation we received this afternoon and are continuing our discussions with Congress," spokeswoman Dana Perino said after lawmakers unveiled a proposed 15-billion-dollar blueprint.

Perino, who earlier had said a deal with lawmakers was "likely" on Monday, said talks in recent days had yielded "a lot of progress" towards legislation "automakers restructure and achieve long-term viability."

She made no mention of a deal, however, and a senior administration official who requested anonymity said a deal on Monday was unlikely and that the White House and the Democrats who control the US Congress were at odds on the issue of viability.

US President George W Bush said that "the definition of viability is open to discussion," and that "viability means that all aspects of the companies need to be re-examined to make sure that they can survive in the long term.

"It includes an analysis of business plans, dealerships, product lines, and labour contracts as well as the internal dealings of the company," he told ABC television in an interview.

"Hopefully we'll get something done," said Bush. "These are important companies, but on the other hand, we just don't want to put good money after bad."

"Long-term financing must be conditioned on the principle that taxpayers should only assist automakers executing a credible plan for long-term viability," Perino said in a statement.

"We'll continue to work with members on both sides of the aisle to achieve legislation that protects the good faith investment by taxpayers," the spokeswoman said.

The anonymous senior administration official said talks were still ongoing in the US Congress, as both sides signaled optimism about reaching a deal to help save the giant manufacturers.

Earlier, top Democrats said they had sent the proposed plan, which would lend some 15 billion dollars to the battered automotive sector, to the White House and would soon introduce legislation carrying out the plan.

"Fifteen billion is the maximum that's available, given the president's threat to veto anything else," said House Financial Services Committee chairman Barney Frank, one of the top Democrats in the discussions.

Officials close to the talks said earlier on Monday that the US legislature could authorize the rescue package, which would call for a massive restructuring and tough government oversight, by mid-week.

Democrats, who control Congress, worked with White House negotiators over the weekend on what amounted to a short-term lifeline to the auto industry. The deal is intended to sustain them through March, until after president-elect Barack Obama takes office on January 20.

Senate Majority Leader Harry Reid said the blueprint aimed to "give the automakers the chance to clean house and return to a responsible path toward profitability."

"The jobs of millions of American workers are at stake, along with the financial security of millions of families. So while we take no satisfaction in loaning taxpayer money to these companies, we know it must be done," he said.

Senate Minority Leader Mitch McConnell underlined the proposal's taxpayer protections.

"As we consider new legislation this week, we must first ensure that we do no harm to taxpayers later in our efforts to help any one particular industry now," said McConnell.

"That is why Republicans insist that any proposal aimed at helping the auto industry include a firm commitment on its part to significant and fundamental reform. Troubled automakers cannot expect taxpayer help without a serious commitment to change their ways permanently," he said.