Auto bailout deal may soon emerge, but biggest roadblock is public outcry

House vote expected by next week

WASHINGTON -- The White House and congressional leaders took steps Friday to break their weeks-long deadlock over how to help the ailing American auto industry.

Even if they reach an agreement, however, members of Congress signaled Friday that significant hurdles remain: Constituents are angry about bailouts, U.S. car companies based in Detroit can't shed a shaky public image, and lawmakers are uncertain how much aid to the auto companies will eventually cost.

Bush administration officials and key members of Congress are expected to talk over helping Detroit's Big Three. House Speaker Nancy Pelosi, D-Calif., said the House will vote next week on legislation.

The car companies are seeking $34 billion, as General Motors and Chrysler are seen as facing bankruptcy shortly if they get no help.

Pelosi was ready to discuss softening her opposition to using money from a $25 billion loan, passed earlier this year, money intended to accelerate Detroit's production of fuel-efficient vehicles. The White House wants to redirect the funds as emergency aid, but Pelosi thinks that would be a setback to environmental goals.

Pelosi and White House Chief of Staff Josh Bolten spoke Friday, and more talks are expected over the weekend. Pelosi has urged the White House to release funds from the $700 billion financial rescue plan approved in October. Pelosi is expected to seek a timely repayment of the funds.

The potential for a breakthrough comes after hearings Thursday at the Senate Banking Committee and Friday at the House Financial Services Committee showed that most members agree the auto industry is in trouble, but that there are wide disagreements about how to proceed.

Among the obstacles:

CONSTITUENT ANGER over the $700 billion plan. "Psychologically, it's a big impediment," said Rep. Gary Ackerman, D-N.Y. "We rushed to the [House] floor and tried to bail out the financial sector, and people have not felt any benefits."

POOR PUBLIC IMAGE of the car companies. GM's Rick Wagoner, Ford's Alan Mulally and Chrysler's Robert Nardelli were seen widely as hurting their cause last month when they arrived in Washington on corporate jets without a specific plan for any taxpayer bailout money they would receive.

This time they were far more self-effacing and precise -- and drove to Capitol Hill -- but some still found their presentations lacking.

CONCERN OVER DEALERSHIPS. Leaner car companies mean fewer dealerships. Rep. David Scott, D-Ga., said he represents 31 towns and cities in metropolitan Atlanta, and "dealers are an integral part of that economy."

UNCERTAINTY ABOUT THE EVENTUAL COST. Is it $34 billion -- $7 billion for Chrysler, $18 billion for General Motors and $9 billion for Ford -- or is that just a down payment?

CONCERN ABOUT THE CONSUMER. Rep. Donald Manzullo, R-Ill., looked at the automakers' detailed plans for how they'll restructure and found no mention of how or why consumers would start buying their cars once more.

"Their plan needs to show how to get Americans buying cars again," he said.