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Dems plan vote on aid to automakers despite opposition

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  • NEW: Democrats schedule test vote on bill on Wednesday
  • Democrats want to use $25 billion of $700 billion bailout to help automakers
  • Sen. Dodd says there is little GOP support for giving loans to automakers
  • Bush administration has signaled reluctance to help struggling Big 3
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From Ted Barrett
CNN Congressional Producer
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WASHINGTON (CNN) -- Senate Democrats on Friday said they plan to vote on a bill meant to aid struggling automakers despite vocal opposition from Republicans.

Senate Majority Leader Harry Reid, D-Nevada, said the Senate would vote next week on the measure during a lame duck session of Congress.

The bill, which was being drafted by Sen. Carl Levin, D-Michigan, would direct the Treasury to provide $25 billion in loans to the automakers from the $700 billion bailout package Congress originally passed to help the troubled financial industry.

A test vote on the bill is scheduled for Wednesday. It is unclear whether the Democratic leadership will have the 60 votes needed to overcome any potential Republican filibusters.

The Democrats will have one less vote in the Senate next week as President-elect Barack Obama plans to resign his Senate seat on Sunday.

In an attempt to garner more support for the bill, Reid said an extension of unemployment benefits would also be added to the legislation.

"These two provisions [auto loans and unemployment extension] both address especially urgent needs and seem most likely to win your support and the support of your caucus," Reid wrote in a letter Friday to Senate Minority Leader Mitch McConnell, R-Kentucky.

McConnell, who has auto industry manufacturing in his state, has not said if he supports the bill.

But McConnell's spokesman, Don Stewart, told CNN the senator prefers making it easier for automakers to get access to $25 billion in loans already approved by Congress earlier this year to help the manufacturers retool their factories to make more fuel-efficient cars.

That money is held up by red tape at the Department of Energy, and Republicans say they support writing legislation to force its quick release.

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But prospects for a federal bailout for the auto industry appeared dim Friday after the top Democrat on the Senate Banking Committee said there was little support from Republicans for the measure to help troubled automakers.

The Democratic chairman of the committee, Sen. Chris Dodd of Connecticut, expressed doubts about moving quickly.

"The automobile industry is very important -- one out of every 10 jobs in the country is related to the automotive industry," Dodd said Friday. "But clearly we shouldn't be writing checks without some clear conditionality of what's going to happen with that industry -- if they're going to change and get back on their feet again."

"I'm hopeful we can do something, but I want to make sure if we do it, we're going to do it carefully," he added.

Dodd's assessment comes as the Big 3 automakers continued to be hit with bad economic news. General Motors is trading under $3 a share, the lowest GM has traded in more than six decades. And Ford announced last week that it lost $3 billion during the last quarter.

On Thursday Dodd said there is not enough support among Senate Republicans to pass a proposed bailout package for the auto industry.

"Right now I don't think [we have] the votes," he told reporters. "I don't know of a single Republican willing to support" it. Video Watch why the GOP is cool to the bailout »

It's unclear how much Republican opposition there is to the bill.

One moderate GOP senator, George Voinovich of Ohio, announced Thursday he supports the proposal.

But other Republicans strongly oppose it. Sen. Richard Shelby of Alabama, the top Republican on the banking committee, said the bailout would "reward mismanagement" in Detroit. Video Watch why automakers want help »

And one Democrat, Sen. Bob Casey of Pennsylvania, told CNN he was reluctant to allow the TARP funds to be used for the auto industry when the money has yet to be used to help homeowners facing foreclosure.

Dodd also told reporters that the Treasury Department "confirmed" to him that it already has authority to use the TARP funds for the auto industry.

During a press conference on Wednesday, however, Treasury Secretary Henry Paulson signaled that he was reluctant to use the bailout program to help the automakers, saying, "the intent of the TARP was to deal with the financial industry."

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For that reason, Dodd said, Democrats should consider waiting for President-elect Obama to take office so Treasury can act without legislation.

Despite Dodd's assessment, Democratic leadership aides in the House and Senate said they are moving forward with plans for votes on the bill next week.

CNN's Scott J. Anderson contributed to this report.

All About Christopher DoddU.S. Senate Committee on Banking, Housing, and Urban Affairs

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