WASHINGTON – As House Speaker Nancy Pelosi leads a chorus of support for a bailout of the U.S. auto industry, there are growing cries to let nature takes its course and allow Detroit's big three automakers to die.
Pelosi has asked Rep. Barney Frank, chairman of the House Financial Services Committee, to draft legislation and a companion effort is under way in the Senate.
Pelosi said she was confident that lawmakers would consider "emergency and limited financial assistance" for the auto industry under the $700 billion bailout measure that passed Congress in October. She urged the outgoing Bush administration to support a compromise.
"In order to prevent the failure of one or more of the major American automobile manufacturers ... Congress and the Bush administration must take immediate action," Pelosi said.
Pelosi did not specify how large an aid package she would seek.
The Bush administration has concluded that the bailout bill that passed earlier does not allow loans to the auto industry, but Pelosi is hopeful that lawmakers return to the Capitol for a lame-duck session beginning next week.
But Democratic leaders will need to convince some skeptical lawmakers who question whether a bailout would cause changes in the auto industry or simply lead to more handout requests from other industries.
"Once we cross the divide from financial institutions to individual corporations, truly, where would you draw the line?" asked Sen. Jeff Sessions, an Alabama Republican.
Michigan Gov. Jennifer Granholm said Wednesday that the crisis in the auto industry is urgent, arguing that "the national economy rests on this."
"This industry supports one in 10 jobs in the country," Granholm said Wednesday on CBS' "Early Show." "If this industry is allowed to fail, there would be a ripple effect throughout the nation."
She added: "This government decided that it was going to step in and throw $700 billion at the financial sector. We're just asking for a fraction of that."
Pelosi, who is hoping for a postelection session of Congress next week, said any assistance to the industry should include limits on executive compensation, rigorous government review authority and other taxpayer protections.
Her request for legislation came less than a week after General Motors Corp. and Ford Motor Co. posted bleak third quarter earnings reports. GM, the largest U.S. automaker, posted a $2.5 billion quarterly loss Friday and warned that it may run out of money by the end of the year without government aid.
"We're in a situation where there's a great unknown about what will happen," said Sen. Debbie Stabenow, a Michigan Democrat. "And a great concern that at least one of the companies will find themselves in a situation where they cannot make it until January 20," when President-elect Barack Obama is inaugurated.
GM spokesman Greg Martin said the automaker was "ready to work with Congress and the administration to secure the immediate support we need to bridge the current economic crisis."
Obama has urged the Bush administration to do more to help the industry and aids said he raised the issue with President Bush on Monday in an Oval Office meeting. Officials familiar with the conversation said the president replied he was open to the idea.
The Bush administration, meanwhile, has said that enactment of a free trade agreement with Colombia is its top priority in Congress.
Many Democrats oppose the proposed agreement as written. But it is unclear what, if any, compromise might be possible that would allow auto assistance and a trade agreement to be the last major measures signed into law by the outgoing president.
FOX News' Chad Pergram and The Associated Press contributed to this report.