The Bush administration on Friday dropped its opposition to the use of 700 billion bank rescue fund to provide financing for manufacturers car after the U.S. Senate refused to approve 14 billion U.S. dollars emergency loan.

"Because the Congress did not act, we are willing to avoid imminent failure until Congress reconvenes and acts to address long-term viability of the industry, " Treasury spokeswoman Brookly McLaughlin said in a statement.

No specific announcement of a rescue plan was made because there is still time before General Motors Corp. (GM) and Chrysler LLC – in most companies at risk of foreclosure – were left without cash. However, the White House made clear that the government is ready to support companies using a portion of the funds allocated to the Relief Program Troubled Assets (TARP).

"The current weak state of the economy is such that he could not support a body blow as a disorderly failure in the automotive industry, "said the White House, Dana Perino.

The government has used about 335 billion U.S. dollars in banks and insurance companies over the past two months, leaving about 15 thousand million dollars of the $ 350 billion authorized by Congress for the TARP fund available for use. Treasury officials have been reluctant to make funds available for the automotive industry, however, that money is still needed to support existing programs.

If the Treasury wants to use the second half of 700 billion bailout approved in October, the first administration will secure congressional approval.

A measure of the concession companies $ 14 billion in auto loans was approved by the House of Representatives last Wednesday, but did not get Senate approval.

"It's over with," said Senate Majority Leader Harry Reid, D-NV, after the Senate vote. "This is going to be very, very bad for Christmas many people. "

Democrats blamed Senate Republicans for the failure of the bill, and Senate Republicans on lap association fault.

"We're hoping that Democrats will continue to negotiate but I think we've reached a point that the work has to give if they want A bill that could be done, "said Sen. Richard Shelby, Republican of Alabama.

Of course, the disappearance of the bill left President George W. Bush at a crucial impasse and with virtually no option to open the treasury.

"The consequences of the Senate Republicans' failure to act could be devastating to our economy, to the detriment of workers, and destructive to the automotive industry United States unless the President immediately directed Secretary Paulson to explore other options in the short term financial assistance, "said House Speaker Nancy Pelosi. Action by President Bush is the "only viable option," he added.

Detroit's Big Three employ over 200,000 people and millions U.S. workers more support indirectly through suppliers and dealers. Its collapse ultimately could cost the economy more than 2 million of total jobs. Not to mention the approximately 1 million Americans – including many retired auto workers – who depend on the auto companies U.S. pension and healthcare benefits.

Ford Motor Co. (F), which has more cash available to both GM and Chrysler, has said he would not seek government funding, but urged Congress to help their competitors because their supply and distribution systems are so intertwined.

News and Related Story:

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• Money Tomorrow:
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Read more on automakers, Troubled Assets Relief Program (TARP), 2008 Financial Crisis at Wikinvest

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Article Source: ArticlesBase.com – White House Opens Tarp to Auto Industry After Congress Fails to Approve Loans

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