Obama takes a low-profile role in talks to rescue automakers

WASHINGTON - While President-elect Barack Obama publicly sidelined himself during congressional debate over an auto-industry bailout this week, he and his top aides quietly prodded congressional leaders to find a solution to rescue struggling automakers.

Obama talked to congressional leaders, while his new chief of staff, Rahm Emanuel, and congressional liaison, Phil Schiliro, were routinely dialed into conference calls to discuss the status of negotiations.

"They basically were encouraging us to stay at the table and get something done," said Sen. Debbie Stabenow (D., Mich.), one of the senators involved in the talks.

Yesterday, Democratic leaders ordered Detroit's Big Three automakers to submit what amounts to a detailed loan application to Congress so lawmakers can decide whether to give the beleaguered industry an emergency $25 billion lifeline.

In a letter to the auto executives, House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid demanded a detailed accounting by Dec. 2 of the companies' financial condition and short-term cash needs, as well as how they would achieve long-term viability.

Obama's low-key role in the auto-rescue debate demonstrates the Obama team's reluctance to weigh in on a congressional dispute that was not only partisan but also divided House and Senate Democrats.

With a strong chance that a deal could fail, a high-profile role for Obama would have been risky and could have linked him too closely to a congressional stalemate.

Indeed, when Sen. John McCain injected himself into congressional negotiations over a bailout for financial institutions in September, it proved to be a political setback for the Republican presidential candidate.

What's more, officials pointed out that a lame-duck session of Congress in the midst of a presidential transition is a tough period to find legislative agreement.

"It's the closing days. It's a very difficult environment to do anything substantial," said Sen. Richard J. Durbin (D., Ill.), a member of the Senate Democratic leadership and a close ally of Obama's.

Durbin said Obama "has continued to make it clear that these are decisions before this president and this Congress."

"He has been following it carefully because it would have an impact on his presidency," he added. "But he is not intervening either directly or indirectly."

In his first postelection comments about the auto bailout, Obama advanced a proposal to accelerate a $25 billion loan that Congress had authorized for automakers to retool and manufacture more energy-efficient cars.

"I would like to see the administration do everything it can to accelerate the retooling assistance that Congress has already enacted," Obama said in his Nov. 7 news conference in Chicago.

The Bush administration then urged Congress to change the terms of the loan so the automakers could use it to cover operational costs. Democrats in Congress, however, balked at the idea, arguing that it would undercut a major environmental effort.

Instead, Democrats called for the auto loan to be tapped from the $700 billion set aside to bail out financial institutions, a step the White House and congressional Republicans opposed.

After that, Obama limited his public comments to broad calls for assistance to the ailing industry. His most detailed remarks came during a

60 Minutes

interview that aired Sunday.

"For the auto industry to completely collapse would be a disaster in this kind of environment, not just for individual families but the repercussions across the economy would be dire. So it's my belief that we need to provide assistance to the auto industry. But I think that it can't be a blank check," he said.