November 18, 2008: 12:36 PM EST
WASHINGTON -(Dow Jones)- Proposals to give U.S. automakers $25 billion in funds from the Treasury's financial-market rescue package are "unnecessary and unreasonable," the White House said Tuesday, stiffening its opposition to legislation introduced by top Democrats this week.
"We're going to draw the line at the $25 billion that has already been appropriated," White House spokeswoman Dana Perino said, referring to the Department of Energy loan program designed to accelerate the development of fuel-efficient vehicles.
With General Motors Corp. (GM) fighting to stay afloat, bills offered in the House and Senate would grant automakers $25 billion from the Treasury's Troubled Asset Relief Program, or TARP, and put restrictions on the companies that participate. The Bush administration says that money is strictly for the financial sector, however.
"We just don't think we should provide the $25 billion that was already on the table, plus an additional $25 billion, unless companies can show us that they have a long-term path for viability," Perino said. "They want the money that's already been appropriated ... and they want an additional $25 billion, which we think is unnecessary and unreasonable at this point."
Without the support of the White House and key Republicans, the auto legislation's prospects look dim. Perino said a compromise would be to amend the DoE loan program to allow companies that can prove "viability" to access the funds sooner. She said the funds could then be used for things other than retooling to make more fuel-efficient vehicles.
"We think that we already have a bipartisan solution," she said. "Perhaps its so logical and so reasonable that people can't really just get their arms around it because it's Washington, D.C."
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