Dems to Big Three: ‘Get act together’

Democratic leaders shelved plans for an auto industry bailout Thursday, telling Detroit’s Big Three to come up with a business plan after Thanksgiving if they want billions in aid.

“We want them to get their act together,” said Senate Majority Leader Harry Reid (D-Nev.), at a hastily arranged news conference on Thursday afternoon. “The sad reality is that no one has come up with a plan that can pass the House and Senate and get signed by President Bush.”

{mosads}The car companies must draw up plans by Dec. 2 in order to receive billions in federal dollars in emergency aid, the leaders said. Leaders will return in December to review the plans, and they said Congress would return on Dec. 8 to consider a proposal to help the auto industry.

The leaders made their announcement after shelving a possible deal worked out by Republican and Democratic senators from Rust Belt states. That plan would lift restrictions on $25 billion in money previously approved to help automakers retool their plants to make more fuel-efficient cars.

Democratic leadership has instead pushed a plan that would give the companies $25 billion from the $700 billion financial rescue package, but Senate Republicans and the White House have been firmly opposed.

Sen. Chris Dodd (D-Conn.), who chairs the Senate Banking Committee, said he will hold hearings in December, and warned that Detroit faces “an uphill climb” to win support.

“Accountability, viability, how it’s going to work, there are all sorts of questions that will be asked before we’ll be able to accept a proposal that will enjoy a more-than-one-vote margin,” Dodd said of his hearings.

House Majority Leader Steny Hoyer (D-Md.) said House Financial Services hearings will begin the week of Dec. 1 to consider the industry’s “viability and accountability” plan, and “to vet that plan.

“My expectation,” Hoyer said, “is that we’ll take action on the week of Dec. 8 to adopt the plan that will give the automobile industry the opportunity to remain viable and stable, maintain their employment, and get automobile sales going again.”

“This will hopefully be a proposal that will enjoy broad-based support,” he said.

Democrats hope the time will increase pressure on Republicans to shift their position. A number of senior Republican leaders this week, however, said they were content to see the auto companies file for bankruptcy.

The impasse came as the stock market plunged again. The Dow Jones Industrial Average closed another 445 points down on Thursday, and has lost about 900 points in the past two days.

Sens. Carl Levin (D-Mich.), Kit Bond (R-Mo.) and George Voinovich (R-Ohio) had worked out a compromise bill in consultation with the White House. Their bill would allow the Energy Department loans to be used by the auto companies for other purposes. The Big Three would be required to repay the money, and would also have to submit a plan to the Commerce Department on their future viability.

“The President has insisted that help for the auto industry be contingent on the industry making the changes needed to be viable. We are pleased the Democratic leadership now agrees that is necessary,” said White House press secretary Dana Perino in a statement supporting the compromise bill.

She said President Bush would “encourage the Congress to pass it as soon as possible.”

Efforts by the three auto companies to win help in this week’s lame-duck session seemed to backfire when lawmakers learned the Big Three’s executives had traveled to Washington on corporate jets.  

Democratic leaders called the chief executives “arrogant” for demanding a taxpayer-funded rescue while traveling in style.

“It was incredible to me the lack of understanding of how angry people are about the situation,” Dodd said.

Bond on Thursday said executives should consider “selling their corporate jets” in their upcoming business plans.

A spokesman for General Motors, the automaker seen as being in the most dire straits, said it would come forward with a plan.

“We appreciate the Congress’s recognition of the auto industry’s vital contribution to the nation’s economic strength and national security,” a GM spokesman said. “We intend to deliver a plan to Congress that shows them a viable General Motors.”

It is unclear how long GM can stay in business without a cash infusion. GM has repeatedly warned its cash situation is dire, but argues a bankruptcy could force the company to “liquidate.” Chrysler, meanwhile, has already considered bankruptcy contingency plans. Ford is marginally stronger than the other two.

Levin warned that by not taking immediate action, House and Senate leaders were accepting a large responsibility for anything that should happen in the next two weeks. “Now,” he said, “this is right smack in the Congress’s lap.”

Most lawmakers, though, said that they believed the industry would survive the few weeks.

“Let’s be honest here,” said Senate Majority Whip Dick Durbin (D-Ill.). “If their failure is that imminent, it’s unlikely we would ever reach an agreement that could be signed by the president in time to help them.”

J. Taylor Rushing, Sam Youngman and Silla Brush contributed to this article.