House approves automaker loans; bill goes to Senate

The House of Representatives overwhelmingly voted to approve a larger spending bill which includes an initial $7.5 billion to fund loans to automakers and administration of the loan program, with a goal of retooling older plants to build more fuel efficient vehicles. The vote was 370 to 58; the bill will keep the government running in the new fiscal year, which starts on October 1, and is expected to win easy passage.

The $25 billion in loans was authorized in 2007, but not funded, as part of higher gas mileage standards. Part of the condition of the law is that the loans can only be used on vehicles that will have at least 25% higher gas mileage than existing, similar models.

Michigan’s John Dingell, chair of the House Energy and Commerce Committee, noted that the loans would cost just over 1% of the $700 billion proposed by the White House to bail out financial firms, and that the loans were to be repaid at a profit.