This is the VOA Special English Economics Report.
Congress faced a big question this week,
but the answer will have to wait.
The heads of the Big Three American automakers
came to Washington to ask for money -- on their private jets, critics noted. The
chiefs of General Motors, Ford and Chrysler asked for twenty-five billion
dollars in new loans. Congress already approved twenty-five billion in
September to help the industry develop fuel-efficient vehicles.
leaders in Congress proposed to offer the additional loans with money from the
financial rescue program approved last month. But Treasury Secretary Henry
Paulson objected. He says the seven hundred billion dollars is just for
investing to strengthen the financial system.
On Thursday, a group of Senate Democrats and
Republicans announced agreement on a compromise. It would let the companies
temporarily use the fuel-efficiency loans to pay for daily operations. G.M. and
Chrysler both say they could be out of money by early next year.
But Senate Majority Leader Harry Reid says
there are currently not enough votes in Congress to pass any bailout plan for
automakers. He says they failed to make their case that this appeal will be the last.
Now, the companies have until December second to explain how they would
use the loans as part of a long-term plan to save their business.
Congress may consider legislation the week of December eighth, but only
if the plans are acceptable.
Peter Morici, a professor of international
business at the University of Maryland, is among economists who oppose a
bailout. He appeared at this week's hearings. He says the Big Three should be
permitted to fail. If they seek bankruptcy protection, he says, they will be
able to cut costs, reorganize and become competitive again.
But General Motors chief
executive Rick Wagoner warned that the economy could lose three million jobs in
the first year if the Big Three fail. They employ a total of about two hundred
forty thousand people. But that does not include dealers or suppliers or the auto
parts industry. Auto sales, though sharply reduced now, usually represent about
four percent of the economy.
The industry chiefs blamed the credit crisis for keeping
people from getting car loans. But lawmakers
said poor business decisions have hurt the Big Three. Autodata Corporation says
fifty-three percent of new cars and light trucks sold in the United States in
the first ten months of this year were imported.
that's the VOA Special English Economics Report, written by Mario Ritter. I'm Steve