White House Open to Using Bailout Money to Aid Detroit

White House Open to Using Bailout Money to Aid Detroit

WASHINGTON — President Bush and the Treasury Department signaled on Friday that they would consider dipping into the $700 billion bailout program for financial institutions to aid the Big Three car companies, after Republican senators refused to support a compromise proposal to rescue the automakers.After Senate Republicans balked at supporting a $14 billion auto rescue plan approved by the House on Wednesday, negotiators worked late into Thursday evening to broker a deal, but deadlocked over Republican demands for steep cuts in pay and benefits by the United Automobile Workers union in 2009. On Friday, Ron Gettelfinger, the president of the autoworkers union, said he was heartened by the response from the White House and Treasury Department, telling reporters at a news conference, “We need action sooner rather than later.” “It’s important for the White House to exert their influence to release this money as quickly as possible,” Mr. Gettelfinger said. “We cannot afford a run on the banks.”

The failure in Congress to provide a financial lifeline for G.M. and Chrysler was a bruising defeat for President Bush in the waning weeks of his term, and also for Mr. Obama, who had urged Congress to act to avoid a further loss of jobs in an already deeply debilitated economy.

The Senate majority leader, Harry Reid of Nevada, voiced weary resignation after the package stalled. “This is going to be a very, very bad Christmas for a lot of people as a result of what takes place here tonight,” he said.

The Republican leader, Senator Mitch McConnell of Kentucky, said: “We have had before us this whole question of the viability of the American automobile manufacturers. None of us want to see them go down, but very few of us had anything to do with the dilemma that they have created for themselves.”