Congress and the White House are close to a deal to give struggling U.S. automakers $15 billion in loans and require the industry to restructure in order to survive in the marketplace.
Under the proposal, the loans - which would come from funds already appropriated - would be made available immediately to Chrysler, Ford and General Motors. In return, the three automakers would have to submit restructuring plans by March.
Congressman Barney Frank, a Massachusetts Democrat, discussed aspects of the proposal at a Capitol Hill news conference on Monday.
"They will have to demonstrate by the 31st of March that based on this they can go forward in an efficient way, producing a car that they think will sell," he said.
Critics of the U.S. automobile industry say years of mismanagement have been responsible for a decline in sales and plant closures.
Speaking on the Senate floor, Republican Senator Mitch McConnell of Kentucky said members of his party would demand that any plan aimed at helping the industry include a firm commitment to significant and fundamental reform.
"Troubled automakers cannot expect taxpayers' help without a serious commitment to change their ways permanently," he said.
Speaker of the House of Representatives, Nancy Pelosi, sought to assure Republicans that that would be the case.
"Unless the restructuring that is called for in this legislation and the goal of viability is achieved by March 31st, there is no justification for spending any more taxpayer dollars as a loan or any other way," she said.
Supporters say the aid is needed to prevent the collapse of one or more of the three major automakers, which could cost the industry millions of jobs.
"We must act not to reward the executives of the 'Big Three,' or their failures, but to invest in the millions of Americans who could face the consequences of their failures," said Senate Majority Leader Harry Reid.
The White House is considering the proposal and is vowing to work with lawmakers.
"If we can meet half way with Congress on some of these issues and get the legislation here and get this done, we can hopefully turn around the automakers for long-term viability which will be to the benefit of everybody," said White House Spokeswoman Dana Perino.
The proposal includes strict oversight provisions, including the creation of a position to oversee industry restructuring.
Supporters hope the Senate and House will vote on legislation during their brief post-election session this week.
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