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Rejected: Senate fails to pass Big Three bailout
Dec. 12. 08
Source: Leftlanenews

The United States Senate voted late Thursday evening to reject a $14 billion bailout of the U.S. auto industry. The defeat came at 11:10 p.m. ET after heated debate over various alternative proposals and compromises, all of which failed after initial signs of hope. Votes were 52 in favor and 35 against. 13 Senators did not vote. While the number of yeas was greater than nays, falling short of 60 votes makes the gridlock of a filibuster unavoidable, thus a de facto defeat.

Senate Majority Leader Harry Reid said the failure of the bill could mean any effort to rescue the Big Three is dead for the rest of the year. If true, this could mean GM and Chrysler might have to file for bankruptcy in the coming days. Earlier, it was reported that GM hired law firm Weil Gotshal & Manges LP to handle a possible Chapter 11 filing. Days ago, it was revealed Chrysler retained council of Jones Day for the same reason. It now appears the companies are closer than ever to having to enter bankruptcy protection.

Two hours before the vote, it appeared a bipartisan compromise was at hand. An amendment proposed by Republican Senator Bob Corker called for immediate concessions by the UAW, but negotiations fell apart at the last minute. The plan called for the immediate elimination of the UAW Job Bank, plus significant compensation reductions for all workers.

Reid said he was “terribly disappointed” the alternative proposal never came together. Instead, the Senate had to vote on the original $14 billion proposal passed by the House earlier this week.

Democrats are now calling on Treasury Secretary Henry Paulson to tap into the $700 billion TARP fund to help the Detroit Three. Some Senators argue the majority 52% vote — though below the filibuster-proof threshold of 60% — should serve as a message to Paulson that he must act. So far, though, Paulson has been unwilling to use funds from the Wall Street rescue program.