U.S. House leaders want loans for automakers soon

WASHINGTON (Reuters) - Democratic leaders of the House of Representatives would like to see a provision enabling automakers to access at least $25 billion in low interest government-backed loans clear Congress within the coming weeks, Speaker Nancy Pelosi said on Thursday.

Pelosi said the exact legislative path for the loan program has not been determined, but she told reporters the House plans to consider a handful of must-pass measures before the end of the fiscal year on September 30.

"Certainly we'll have it in something," Pelosi said.

The California Democrat again mentioned the possibility of attaching auto industry assistance to a second economic stimulus package. However, it is unclear if such legislation will materialize before lawmakers leave town, possibly for the end of the year, or even be considered in the Senate.

The more likely scenario, industry and congressional officials say, is attaching an auto provision to a catch-all bill funding operations of the federal government, called a continuing resolution.

Senate leaders have not said what they would go along with.

Up to $25 billion in government-supported loans for all automakers was included in the 2007 energy law that was enacted last December. For industry to access the assistance, Congress must approve $3.8 billion in taxpayer funds to cover the default risk.

The legislation was tailored to help struggling Detroit automakers even though overseas companies can apply for the loans if they meet certain criteria.

The White House does not oppose assistance as long as it goes to help automakers retool plants, develop new technologies or meet a new federal requirement to increase auto fuel efficiency by 40 percent by 2020.

The Bush administration is less supportive if it sees the industry using the money as a tool to stem financial losses.

(Reporting by John Crawley, editing by Richard Chang)