Sunday, December 7, 2008

BREAKING Report : Congress to Give US Automakers $15 Billion in Federal Loans

Last week, Detroit's big 3 automakers gave out their plans for the Congress. The total money needed to save the automakers is about $34 billion. We were all waiting for the US Congress to reply. And they did now.

Democratic leaders of Congress revealed that they had reached an agreement on a bailout plan for the automakers. The deal was reached between Democratic leaders and the Bush administration in the White House that they will supply around $15 billion in federal loans to the struggling US auto industry. While GM, Ford and Chrysler asked for a combined maximum of $34 billion, the $15 billion is designed to ensure they stay alive until March when the issue will be readdressed with the input of the Obama administration. GM and Chrysler reportedly need around $11 billion to survive the new year, while Ford has said it would only need government aid if they needed.

Details of the likely deal are still in the works but it is reported that the money will come from a special $25 billion program that was initially intended to help the Big 3 develop more energy efficient technologies instead of the $700 billion pool created to aid financial-industry companies. However, Nancy Pelosi, Speaker of the House of Representatives, said that the Big 3 must repay this loan "within a matter of weeks."

Both the Senate and House of Representatives have confirmed they will be meeting this Tuesday to vote on the deal, and it's expected that they'll agree depending on the plans that the automakers gave.

So party on, Detroit.

Source : [Reuters]

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