WASHINGTON (AFP) — Democratic leaders in the US Congress called Saturday for funds contained in a 700-billion-dollar federal rescue plan for the financial sector to be diverted to the struggling auto industry.
In a joint letter from Senate Majority Leader Harry Reid and House Speaker Nancy Pelosi made public on Saturday, they urged Treasury Secretary Henry Paulson to use his powers under the Emergency Economic Stabilization Act (EESA) passed to combat the financial crisis.
The act authorized 700 billion dollars in funding and granted Paulson broad powers to purchase financial instruments to restore financial market stability, 250 billion dollars of which has been pledged to buy stakes in US banks.
"We are writing to request that you review the feasibility of invoking the authority Congress provided you under the Emergency Economic Stabilization Act of 2008 (EESA) for the purpose of providing temporary assistance to the automobile industry during the current financial crisis," the letter said.
It added: "Were you to determine that the automobile industry is eligible for assistance under EESA, we would urge you to impose strong conditions on such assistance in order to protect taxpayers and maximize the potential for the industry's recovery."
The biggest US automaker General Motors warned Friday that it would run out of cash in the first half of next year and fellow Detroit giants Ford and Chrysler are also in crisis.
"Friday's news of the automobile industry's record low sales figures only reaffirm the need for urgent action," said the letter, sent after Reid and Pelosi met with auto executives and trade unionists on Thursday.
Democratic president-elect Barack Obama also pledged Friday to help the auto makers, saying they were the "backbone" of US manufacturing.
Copyright © 2013 AFP. All rights reserved. More »