Government may delay auto money
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WASHINGTON -- The $25 billion in low-cost government loans domestic
automakers are banking on to retool plants to build more fuel-efficient
vehicles may not be awarded until mid-2010, the U.S. Energy Department
said Thursday.

That announcement threw cold water on suggestions from Michigan's
members of Congress that Detroit's Big Three could receive the money in
early 2009. The delegation had touted its success in including language
in the funding measure that requires the Energy Department to issue its
final rules for the program within 60 days of passage.

"We have significant doubts about whether distribution of loans by
January 2009 is realistic," said Healy Baumgardner, apparently referring
to a statement by Sen. Debbie Stabenow, D-Lansing, who suggested
automakers could see loans by year's end.

Baumgardner noted "there are a number of legal and administrative
requirements with which the Department must comply, such as the National
Environmental Policy Act, we anticipate it could take at least 6 to 18
months or more, after necessary funds are appropriated" before it
awarded any auto loans.

That response did not sit well with Michigan lawmakers.

"It appears that DOE is making excuses for its own anticipated
failures," said U.S. Rep. John Dingell, D-Dearborn, chairman of the
House Energy and Commerce Committee. "...If DOE is asking for vigorous
oversight to ensure it performs its duties, we will be happy to oblige."

The auto loans are included in a stopgap spending measure to fund the
federal government through March 6. The House has approved the spending
plan. The Senate on Thursday delayed a vote until at least Friday
because of talks over the Wall Street bailout bill, but also is expected
to approve the measure. President Bush is expected to sign the bill
before Sept. 30, when the current budget expires.

The loan program was authorized in the Energy Act passed in December
2007, but the Energy Department didn't begin writing the regulations
until late August.

Other government loan programs also have taken a long time to get
funding allocated. The Energy Department has yet to award loans from a
$2 billion advanced energy program approved in 2005. Last October, it
selected 26 finalists, but hasn't said when it will award funds.

Ford Motor Co. spokesman Mike Moran said the company was "hopeful DOE
can meet the timing outlined by Congress."

U.S. Rep. Mike Rogers, R-Brighton, was more direct.

"This is unacceptable; this investment is too important to Michigan for
the Department of Energy to drag their feet," Rogers said.

The House approved $7.5 billion to cover the cost of the loans.


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