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Compromise sought for a Big 3 bailout

WASHINGTON - Amid fresh assembly-line layoffs, congressional Democrats and the White House sought agreement yesterday on about $15 billion in bailout loans for the beleaguered auto industry.

WASHINGTON - Amid fresh assembly-line layoffs, congressional Democrats and the White House sought agreement yesterday on about $15 billion in bailout loans for the beleaguered auto industry.

President Bush warned that at least one of the Big Three carmakers might not survive the economic crisis.

Several officials said House Speaker Nancy Pelosi of California and White House Chief of Staff Josh Bolten spoke by phone. While no details of their conversation were available, it appeared the House's top Democrat had dropped her opposition to Bush's insistence that the aid come from a fund set aside for the production of environmentally friendlier cars.

The developments came as desperate auto executives pleaded for a second straight day with lawmakers for loans to help them survive, and the government reported the worst single month's job loss in 34 years.

Pelosi's office issued a statement saying legislation would come to a vote in the House next week. The Senate is also scheduled to be in session to consider aid to the automakers.

"Congress will insist that any legislation include rigorous and ongoing oversight to guarantee that taxpayers are protected and that resources are directed to ensure the long-term viability and competitiveness of the American automobile industry," Pelosi's statement said.

Officials in both parties also said the legislation would include creation of a trustee or group of industry overseers to make sure the bailout funds were used to transform General Motors Corp., Ford Motor Co. and Chrysler L.L.C. into competitive enterprises.

At the White House, Bush declared the economy was in a recession, and he urged a gridlocked Congress to act quickly on a multibillion-dollar industry bailout - with taxpayer protections.

"We are going to have to have some give here," replied Massachusetts Rep. Barney Frank, a senior House Democrat, expressing optimism that compromise might be possible. It was unclear whether he was prodding Bush or Pelosi - who have disagreed sharply on the terms of a bailout - or both.

Republicans said there had been no let-up in Bush's refusal to tap the $700 billion financial industry bailout fund to help the automakers.

Numerous officials confirmed that Pelosi had bowed to Bush on the point that had blocked agreement for weeks.

There were also fresh calls during the day for the Federal Reserve to come to the automakers' rescue, possibly with low-cost loans. And Frank said he had talked with Tim Geithner, treasury secretary-designate for President-elect Barack Obama, a possible sign of involvement by the incoming administration.

"I am concerned about the viability of the automobile companies," a somber Bush said as a fresh report showed that employers slashed 533,000 jobs in November.

The president added: "I'm concerned about those who work for the automobile companies and their families. And likewise, I am concerned about taxpayer money being provided to those companies that may not survive." Bush did not elaborate, but executives at both GM and Chrysler have warned that their storied corporations could collapse by year's end.

In addition to November layoffs, GM announced it would cut shifts at factories in Lordstown, Ohio; Orion Township, Mich.; and Oshawa, Ontario, in February.

The chief executives of the three automakers testified for a second consecutive day before Congress in support of their plea for a $34 billion bailout in the form of loans. "We believe this is the least costly alternative," Chrysler's Bob Nardelli said.

For the day, at least, their appeals were overtaken by the severity of the job-loss figures.

Frank said repeatedly that the unemployment statistics had quieted talk of allowing one or more of the automakers to go bankrupt.

"I think it's fair to say that the jobs report today, this disastrous jobs report, has heightened the interest in doing something." With trademark wit, he added, "If we are lucky, we will come out with a bill here that nobody likes, because any bill that any individual liked couldn't pass."