WASHINGTON — A potentially hostile Congress could get to decide whether General Motors and Chrysler LLC receive the additional immediate federal aid they say they need to stay in business.
Last December, after the Senate rejected the companies' pleas for financial help, then-President George W. Bush authorized $17.4 billion in emergency loans anyway. But GM and Chrysler say they need an additional $7 billion by next month.
That timetable places pressure on the March 31 target date for government decisions on the restructuring plans GM and Chrysler submitted last week. President Barack Obama must decide whether to advance more money before his new auto task force has had much time to consider the plans or to add it to other costly requests to lawmakers.
Sen. Bob Corker, R-Tenn., who emerged last year as an outspoken critic of federal aid to the Detroit 3 without tight restrictions, told Automotive News the loan requests from GM and Chrysler represent "a defining moment for this administration."
The White House is not disclosing its strategy. Brian Johnson, an industry analyst for the Barclays Capital investment bank, predicted last week that Obama's administration will continue to provide aid to GM and Chrysler.
That money, like the earlier loans, could come out of a $700 billion fund intended to rescue financial institutions. But that pool is almost fully committed. Asked last week whether the rescue fund will be tapped for new auto industry loans, a GM source said only: "Stay tuned."
The aid prospects could get more treacherous if Obama asks Congress for more funding next month. While Republican lawmakers already are lining up against further loans to GM and Chrysler, some Democrats are uncomfortable with the companies' plans to cut tens of thousands more U.S. jobs.
Public sentiment outside of Michigan and other automaking areas has been cool to more aid for GM and Chrysler and their unionized work forces.
Unions were big backers of the Obama campaign. But grumbling now is coming from the left as well. Robert Reich, a Labor secretary in the Clinton administration, last week questioned the wisdom of aid to automakers unless they preserve jobs.
Even if GM and Chrysler get the aid they seek next month, the debate will not end. GM says it will need an additional $2.6 billion for operations in April and potentially $12 billion more over the next two years — a total of $30 billion in federal loans.
Separately, suppliers say they need $18.5 billion in federal aid. Congress likely would have to consider those requests.
Obama's task force on auto aid held its first meeting Friday. It is led by Treasury Secretary Timothy Geithner and top White House economics adviser Lawrence Summers. It includes representatives of other Cabinet departments as well as Ron Bloom, a former investment banker and United Steelworkers union executive.