White House May Divert TARP Funds to Automakers

The President may tap bailout funds once thought off-limits to Detroit
By Clay Dillow,  Newser Staff
Posted Dec 12, 2008 9:30 AM CST
White House Press Secretary Dana Perino announced this morning that the White House would consider using TARP funds to rescue the ailing automotive industry after talks in Congress died last night.   (AP Photo/Ron Edmonds)
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(Newser) – The Bush administration said today it will consider using funds from the $700 billion market-rescue plan to bail out GM and Chrysler, MarketWatch reports. The shift comes after the Senate failed to pass $14 billion in emergency loans last night. The plans aren't final, but the money could help one or both of the automakers avoid bankruptcy.

"A precipitous collapse of this industry would have a severe impact on our economy, and it would be irresponsible to further weaken and destabilize our economy at this time," said White House spokeswoman Dana Perino. She added that the auto companies, unions, and other stakeholders “must be prepared to make the meaningful concessions necessary to become viable.”