The White House and congressional Democrats tentatively have agreed to loan Detroit's ailing auto industry up to $15 billion to get the Big Three through the next three months -- until the new Congress and new president come up with a longer-term plan -- a source close to negotiations told FOX Business.
The federal aid would come from a fund set aside for the production of environmentally friendlier cars.
The two sides are working over the weekend to hammer out a solution to keep the automakers from falling off a cliff. After giving up on urging President Bush to use money from the $700 billion financial services rescue program, House Speaker Nancy Pelosi said Friday the House would consider legislation next week to provide "short-term and limited assistance" to the auto industry while it undergoes "major restructuring."
Senate Republicans, who can block it, are reviewing the latest plan and are expected to sign off on it.
The White House said Saturday it has had constructive talks with congressional leaders.
Press secretary Dana Perino said automakers must show they are willing to make tough business decisions before they can get taxpayer money. She says the White House is insisting that any money come from an existing fund set aside for the production of environmentally friendlier cars.
The White House also wants to make sure that before any money goes out, there is a good chance taxpayers would get paid back.
Pelosi said the billions of dollars that had been set aside to modernize plants to develop the green cars would be repaid "within a matter of weeks." Democrats said her hope was to include the funds in an economic recovery bill that lawmakers are expected to prepare for President-elect Barack Obama's signature shortly after he takes office.
Officials in both parties also said the legislation would include creation of a trustee or group of industry overseers to make sure the bailout funds were used by automakers for their intended purpose. The funds are designed to last until March, giving the incoming Obama administration and the new Congress time to consider the issue anew.
Top executives from the Detroit automakers spent two consecutive days on Capitol Hill pleading for $34 billion in loans to help the industry survive.
FOX Business' Peter Barnes and The Associated Press contributed to this report.