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White House endorses accelerated auto-loan funds

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White House endorses accelerated auto-loan funds

November 11, 2008 - 10:45 am ET

WASHINGTON (Reuters) - The White House today said it was open to considering any proposals from Congress to accelerate loans to the ailing U.S. auto industry from funds already appropriated.

"We're open to ideas from Congress to accelerate funds they've already appropriated in the auto loan program -- as long as funding will continue to go to viable firms and with strong taxpayer protections," White House spokesman Tony Fratto said.

Congress has approved a $25 billion package of low-interest loans to help automakers meet fuel-efficiency standards.

A spokeswoman for President-elect Barack Obama said he raised the issue of additional help for the auto industry in a meeting with President George W. Bush on Monday.

Fratto would not comment on those talks. "It was a private meeting," he said.

Obama spokesman Robert Gibbs, on the plane back from Washington after the meeting, said Obama and Bush had discussed the "broad health" of the auto industry but the newly elected president did not specifically ask for help for one single American automaker.

"Obama asked for a second stimulus and to use existing measures to help the auto industry," an aide said on Tuesday but gave no further details on what measures were available currently to help the carmakers or the specific provisions of a new economic stimulus plan.

The U.S. auto industry has asked for up to $25 billion in emergency loans in order to prevent the industry's collapse. U.S. auto sales are plunging and General Motors, Chrysler LLC and Ford Motor Co., are burning through billions of dollars of cash monthly.

Obama has acknowledged the gravity of the situation with the automakers and said last in a news conference on Friday that federal help for the distressed industry is a high priority of his transition team.

Top congressional Democrats asked Treasury Secretary Henry Paulson in a letter on Saturday to consider aid to the automakers through the financial bailout initiative that has so far covered banks and other financial services companies.

The Bush administration has not dismissed outright the possibility of extending emergency assistance to the automakers.

But public and private statements from administration officials indicated more clearly on Monday that they believe any new and substantial money for manufacturers would require legislative action.
 

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