The US Senate failed last night to reach a last-ditch compromise to bail out car manufacturers and effectively killed any chance of congressional action this year.
The $14 billion legislation officially died in the Senate late yesterday after supporters failed to get enough support in a procedural vote.
Republican-brokered talks faltered, leaving the chamber at a dead end on an approach for extending $14 billion in loans to avert a threatened collapse of one or more car makers, Senate Majority Leader Harry Reid said in remarks on the floor. "It's over with," Mr Reid said.
The White House said it would evaluate its options in light of the collapse of the bailout legislation.
White House spokesman Tony Fratto declined to say what those options included. The Bush administration has resisted Democrats' demands to use some money from the $700 billion bailout package approved in October to help struggling financial institutions to help the car makers.
Mr Fratto said the failed legislation had "presented the best chance to avoid a disorderly bankruptcy while ensuring taxpayer funds only go to firms whose stakeholders were prepared to make difficult decisions to become viable".
Lawmakers planned to move ahead with a procedural vote on a Democratic-sponsored bill negotiated with the White House that Mr Reid admitted would not succeed.
"There is too much difference" between negotiators to reach an agreement," the Nevada Democrat said.
The late night development followed discussions on a possible compromise that participants said fell apart over proposed wage concessions by the powerful United Auto Workers.
"We were three words away from a deal," said Senator Bob Corker, a Tennessee Republican who proposed the alternative and led the talks.
Senator Christopher Dodd, a Connecticut Democrat, said the main issue of disagreement was the date to require the Detroit autoworkers' pay parity with foreign car makers.
General Motors and Chrysler are seeking billions of dollars in immediate aid, while Ford Motor wants a hefty line of credit.
The industry is reeling from depressed sales, made worse by the credit crunch and the recession and GM and Chrysler said government intervention was required now to avert potential failure.
The House of Representatives passed its version of a Democratic-sponsored bailout on Wednesday but Senate Republicans rejected that measure.
Markets across the Asia-Pacific region were down more than 3 per cent after news the talks had collapsed, with Japan's Nikkei average and Hong Kong's Hang Seng both down more than five percent. US crude prices fell by nearly $2 to $46.11 a barrel.
Reuters