Auto industry may be rescued

Leaders of the US Democratic Party, which now has a majority in both the House of Representatives and the Sentate, have confirmed they are working on a plan to bail-out the auto industry despite a good deal of opposition from the administration. ┬á The call for help comes after the nationÔÇÖs three main automakers- Ford, General Motors, and Chrysler- all saw hefty third quarter losses in sales, and General Motors announced it would run out of cash early in 2009 if market conditions did not approve. ┬á Democrat congressman Barney Frank said the proposed rescue bill would include a $25 billion loan for the carmakers and that the money would come from the $700 billion bail-out package that was approved by Congress last month. ┬á The administrationÔÇÖs first proposal of the rescue deal was to help financial institutions by buying up troubled assets and bad debt. Now with a little more flexibility, the bail-out fund will continue to be used to buy shares in the lenders to help boost their balance sheets.┬á However, the administration currently remains opposed to using the rescue fund to bail out the devastated car industry or to provide guarantees for home loans. Supporters of the bill said that it offers the greatest hope for helping multitudes of Americans facing foreclosure, but US Treasury Secretary Henry Paulson said the $700 billion was intended only for helping the financial sector. ┬á Jeff Sessions, Republican Senator for Alabama said, ÔÇ£Once we cross the divide from financial institutions to individual corporations, truly, where would you draw the line?ÔÇØ┬á Auto industry representatives will have an opportunity to make their case in the need for funding next Wednesday when they testify at a hearing before FrankÔÇÖs committee, and a vote on the bill could come as early as next Thursday.