WASHINGTON-A $25 billion bailout for the auto industry fell flat Thursday when Senate and House leadership decided to postpone the legislation. Lawmakers demanded that the auto chiefs present more specific plans on how they would use the money to the House and Senate banking committees by Dec. 2. Congress plans to reconvene Dec. 8 to reconsider the legislation.
"Until they show us the plan we cannot show them the money," said House Speaker Nancy Pelosi, who has supported providing funds from the $700 billion bailout for the auto industry. Republicans, President Bush, and some Democrats were cold to the idea of pouring bailout funds into the auto industry, though all have agreed that the industry must be preserved somehow.
"The executives of the auto companies have not been able to convince the Congress or the American people that this bailout will be their last," said Senate Majority Leader Harry Reid.
Reid said the chief executive officers from Detroit's Big Three automakers must submit plans that would demonstrate "accountability and viability," though he didn't go into details about what that would mean.
The leaders of General Motors, Ford, and Chrysler had pleaded with Congress on Tuesday and Wednesday for a $25 billion lifeline to save their once-proud companies from collapse, warning of broader peril for the national economy if they fold.
Facing the Senate Banking Committee, these leaders presented the dire economic outcome of their failure.
As car sales plummet, the Big Three are finding themselves short on cash and facing bankruptcy, though Ford is not as bad off as Chrysler and GM.
"It would be better to let them go through that process," testified University of Maryland international business professor Peter Morici on Tuesday, referring to Chapter 11. "If you give them $25 million this month, they will be back."
The CEOs' testimonies did not satisfy lawmakers that this bailout would be a one-time loan, but could be just the beginning. The White House has said the bailout would be a waste of money.
"We don't think that taxpayers should be asked to throw money at a company that can't prove that it has a long-term path for success," said White House Press Secretary Dana Perino.
Both Democrats and Republicans on the Senate Banking Committee were frustrated that the Big Three CEOs would not acknowledge past mistakes or go into details about the future for the use of the bailout funds.
The Michigan delegation was not happy with the congressional leadership's decision, but still presented a compromise proposal that would use the funds from an earlier energy bill that designated $25 billion to automakers for developing more fuel-efficient vehicles, a reallocation of funds that Republicans had been pushing.
The Associated Press contributed to this report.