Intense negotiations Thursday night on Capitol Hill between lawmakers, union officials and representatives from the Big Three automakers produced a possible breakthrough in salvaging the $14 billion auto bailout bill, though it wasn't immediately clear whether Senate Republicans would sign on to the deal.
The latest negotiations came as the Wall Street Journal reported Thursday evening that General Motors had hired lawyers and bankers to consider whether to file for bankruptcy, though the company still is fighting for the federal aid to keep it afloat.
Republicans were demanding upfront concessions from the United Auto Workers as the price for the support needed for passage. It wasn't clear what, if any, concessions the union was willing to discuss.
The Democrats are "ready to go," Senate Majority Leader Harry Reid said Thursday night on the Senate floor in announcing that a tentative deal had been reached. Sen. Bob Corker, negotiator for the Republicans, is taking the latest legislation to his Republican colleagues to see if they will accept it.
Senate Banking Committee Chairman Chris Dodd, meanwhile, said he his "hopeful" a deal would be sealed soon, though not all issues had been worked through yet.
The meetings came after Democratic leaders and the White House made their final pleas Thursday for the passage of the bill -- even as some congressional aides said the legislation is headed toward a quiet death in the Senate. The bill passed the House of Representatives on Wednesday.
Republicans, as well as some Democrats, have requesting that amendments be made to the legislation. Corker has proposed that the federal government to give loans to the auto companies with a provision that General Motors' and Chrysler's debt must be cut by two-thirds by March 15 or they must file for bankruptcy.
Corker also proposed making bondholders and unions take stock in the Big Three in place of some cash payments they're owed. Plus he wanted autoworkers to renegotiate their contracts and adjust their pay and benefits to match what foreign automakers pay their workers in the U.S.
Another amendment, supported by Democrats, calls for the federal government to give tax credits to those who buy American-made cars.
"We're making good progress," Corker said of the meetings.
Corker has also discussed his proposal with General Motors President Fritz Henderson and the head of the private investment company that owns Chrysler.
"They like it," he said, referring to Henderson and his company, Cerberus Captal Management.
Republican Sen. John Ensign told FOX News that he thinks Democratic support is moving in Corker's direction.
Earlier Thursday, Reid pleaded for the hard-fought legislation to be passed when it goes before the Senate.
"We have danced this tune long enough," he said, adding that he hoped for separate votes Thursday on compromise legislation backed by Democratic leaders and the White House, and a Republican version.
If not, Reid said, senators will have a test-vote Friday morning to force a final up-or-down vote within days.
At a news conference in Chicago, President-elect Barack Obama said the government can't just stand by and watch the industry collapse. He said it would have a "devastating ripple effect" throughout the economy.
He told reporters he understands the "anger and frustration" over the situation in which the auto companies find themselves. Leaders of those companies failed to move quickly enough to change, he said.
But Obama said he thinks the government should provide short-term assistance to avoid a collapse of the companies, while holding them responsible and protecting the interests of the taxpayers.
The package under consideration in Congress is a "step forward," he said
White House press secretary Dana Perino also pleaded for the passage of the legislation, telling reporters that the weak economy cannot afford the collapse of the nation's automakers.
Perino cited the latest bad economic news -- a jump in jobless claims to the highest level in 26 years -- in arguing for Senate passage of a bailout package for the Big Three automakers, which employ thousands in Ohio.
She said the president is reaching out to skeptical senators to convince them that the bailout legislation is "the most effective and reasonable approach."
"We think there's a chance that we can get this done today," she said during a morning news conference on Thursday. "We know this is going to be a tough vote."
Perino added that a rejection of the bailout bill would lead to "wide-spread job loss."
The House approved the plan late Wednesday on a vote of 237-170. It would infuse money within days into cash-starved General Motors Corp. and Chrysler LLC. Ford Motor Co., which has said it has enough cash to make it through 2009, would also be eligible for federal aid.
The plan would also create a government "car czar," to be named by President Bush to dole out loans, with the power to force the carmaker into bankruptcy next spring if they didn't cut quick deals with labor unions, creditors and others to restructure their businesses and become viable.
But the legislation has met strong opposition from many Republicans -- including Minority Leader Mitch McConnell -- who claim it does not require enough accountability from auto makers. The Republicans have plans to filibuster the legislation to prevent its passage in the U.S. Senate.
McConnell said on Thursday that the measure "isn't nearly tough enough" on struggling automakers, which employ thousands in Ohio. He said a primary weakness in the measure is with the so-called "car czar." He added that the post wouldn't have the power to force the car companies to make the tough concessions needed to ensure their survival.
On Thursday, Republican senator Tom Coburn told FOX News that he expects the bill will be defeated in the Senate. Coburn said the legislation is "only a short term fix."
And despite pleas by Reid and the White House, a senior Democratic leadership aide told FOX News on Thursday that the rescue package is likely to die when it goes before the Senate.
The aide said that the 60 votes needed are not there to break a Republican-led filibuster. And it is not clear if members will agree to hold a procedural vote Thursday or keep it for Friday morning, the aide said.
FOX News' Trish Turner and the Associated Press contributed to this report.