House bids to help automakers
Legislation would allow industry to obtain $25 billion in low-interest loans.
Wednesday, July 30, 2008
WASHINGTON — Scores of House members are pushing for legislation to help struggling U.S. automakers and auto parts suppliers obtain $25 billion in low-interest loans.
The loans would be made through the Advanced Technology Vehicles Manufacturing Incentive Program, which Congress created last year to help the auto industry meet the new fuel economy standards of 35 miles per gallon by 2020.
But while Congress raised the fuel efficiency requirements in December, it never funded the program to defray retooling costs, which analysts say could amount to tens of billions of dollars.
This week, a bipartisan group of more than 70 House members released a letter urging House Speaker Nancy Pelosi, D-Calif., and other leaders to advance legislation providing $3.75 billion to activate the program. That amount would cover the government's costs of providing up to $25 billion in low-interest loans over five years, as well as a small reserve for defaults.
The loans would be limited to 30 percent of the automakers' and suppliers' actual costs of meeting the new fuel standards.
With rising federal budget deficits and the congressional calendar growing short for this year, passage of such aid would be very difficult. Still, supporters hope the measure could become part of a second economic stimulus package that Congress may consider after returning from its August recess.
"We will likely pass an economic recovery package this September, and it critical that this measure include funding for the Advanced Technology Vehicles Manufacturing Incentive Program," Rep. Betty Sutton, D-Ohio, said in an e-mail exchange Tuesday.
But the White House has been cool to the idea of more economic stimulus, saying the full impact of a round of tax rebates approved earlier this year is still playing out.
