The $14bn rescue package for the US car industry took its first legislative steps towards reality last night.
The House of Representatives agreed the bailout package, voting it through by 237 to 170. General Motors and Chrysler could receive aid by Wednesday of next week, if the package is passed first time in the Senate.
A consensus was only reached after the size of the bailout was slashed to $14bn and agreement reached to have a presidentially appointed ‘Car Czar’ to regulate the car manufacturers. The bill faces massive Republican opposition in the Senate. Richard Shelby, senator for Alabama described the bailout as a “waste of time”.
The Democrats currently have a slim, one-vote majority (50-49) and will need to get at least 60 votes to avoid a Republican filibuster.
If approved, the $14bn loan would be for seven years, payable at 5 per cent interest for five years and 9 per cent for the remaining two.
The ‘Car Czar’ will tightly regulate the car makers and will have to approve any spending over $25 million.