The Bush administration would consider using money from a fund intended to rescue U.S. financial markets to prevent the collapse of the nation’s auto companies, White House spokeswoman Dana Perino said.
“Under normal economic conditions we would prefer that markets determine the ultimate fate of private firms,” Perino told reporters aboard Air Force One. “However give the current weakened state of the U.S. economy we will consider other options if necessary, including use of the TARP program to prevent a collapse of troubled automakers.”
General Motors Corp. and Chrysler LLC have said they need a total of $14 billion in loans to keep operating. An aid package for the automakers failed in the Senate last night.
Bush was pressed by House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid to tap funds from the Treasury’s $700 billion bank-rescue fund.
The Bush administration had warned of a million lost jobs if the industry imploded. The Senate vote was a repudiation of Bush, who personally lobbied for the bill. Only 10 Republicans in the Senate voted to move forward on the auto-rescue plan.