WASHINGTON - Negotiations in the Senate fell apart late Thursday night as Senate Democrats and the Bush administration failed to garner 60 votes to pass legislation for a $14 billion bailout to the auto industry.
Though the House of Representatives passed the bill, the Republican Senate leader Mitch McConnell said he did not support it Thursday, which signaled the bailout's almost certain death.
"I dread looking at Wall Street tomorrow," said Senate Majority Leader Harry Reid.
On Friday stock markets struggled to find direction. Voters around the country have shown much less interest in the legislation than the October bailout of financial firms.
The fallout of the failed vote on the bailout could be bankruptcy for one or more of the Detroit Three. The chief executive officers estimated that their demise would result in the loss of around 3 million jobs. General Motors' CEO Richard Wagoner said his company, without a loan, will need to file for bankruptcy by the end of the year.
Some Republicans believe that General Motors or Chrysler or both should be allowed to enter bankruptcy and begin restructuring under its protection. On the other hand, Ford's CEO Alan Mullaly has said that his company can survive without government help.
President Bush could extend aid to the auto industry before the end of the year under the financial bailout (known as the TARP program), though he has opposed drawing funds for automakers from those funds.
Sen. Bob Corker, R-Tenn., proposed an alternative requiring more concessions from the United Auto Workers union, which McConnell supported, but did not garner Democrat backing. Senate Democrats weren't interested in more concessions to Republicans since they already made compromises to the Bush administration in the legislation, like funding the bridge loan through a previously passed energy bill. The Bush administration lobbied Senate Republicans to support the current bill with little result.
Constituents, it seems, have some fatigue over tax-funded bailouts. Congressional offices that have districts with strong manufacturing sectors didn't receive the same flood of calls they received on the financial bailout in September. Michigan and Ohio offices, where the American auto industry is concentrated, have said that they are receiving about half as many calls about this bailout compared to the $700 billion financial bailout, which sparked an unprecedented influx of calls and feedback from constituents.
The auto bailout had a much smaller price tag, but it stirred weeks of controversy. Even when the legislation faced defeat, manufacturing districts were not notably vocal.
"It's surprising," said Meghan Snyder, spokeswoman for Rep. Jim Jordan, a Republican whose Ohio district is one of the top manufacturing areas in the country, and has received a small volume of calls about the legislation.
What's more surprising is that Jordan openly acknowledged he would vote against the bill - and still, calls didn't roll in. Jordan is a well-known fiscal conservative, as is his fellow Ohioan, Rep. Bob Latta, a Republican who also voted against the auto bailout though he represents a manufacturing district.
Different provisions in the legislation made it distasteful to senators from both parties: from the "car czar" who would enforce restructuring in the companies to a tax shelter included for transit companies to a raise in federal judges' pay.