Bush is considering 145;orderly146; auto bankruptcy

The Bush administration is looking at 8220;orderly8221;bankruptcy as a way to deal with the desperately ailing U.S. auto industry...

The Bush administration is looking at 8220;orderly8221;bankruptcy as a way to deal with the desperately ailing U.S. auto industry, the White House said Thursday as carmakers readied more plant closings and a half million Americans filed new jobless claims.

With Detroit anxiously holding its breath and waiting for federal help, White House press secretary Dana Perino said, 8220;There8217;s an orderly way to do bankruptcies that provides for more of a soft landing. I think that8217;s what we would be talking about.8221;

President George W. Bush, asked about an auto rescue plan, said he hadn8217;t decided what he would do.

But he, like Perino, spoke of the idea of bankruptcies organized by the federal government as a possible way to go 8212; without committing to it.

8220;Under normal circumstances, no question bankruptcy court is the best way to work through credit and debt and restructuring,8221; he said during a speech and question-and-answer session at the American Enterprise Institute, a conservative Washington think tank. 8220;These aren8217;t normal circumstances. That8217;s the problem.8221;

The Big Three automakers said anew that bankruptcy wasn8217;t the answer, and House Speaker Nancy Pelosi said on Capitol Hill that grim new unemployment data heightened the urgency for the administration 8220;to prevent the imminent insolvency of the domestic auto industry8221;.

The California Democrat said Bush has the legal authority to act now, and should attach the same accountability standards included in a 14 billion House-passed and Bush-supported carmaker bailout that died in the Senate last week. That plan would have given the government veto power over major business decisions at any car company that received federal loans.

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8220;With 2 million American jobs riding on the outcome, the administration should provide this assistance with tough accountability standards and an insistence on shared sacrifice,8221; Pelosi said. She spoke after the government announced that initial claims for unemployment benefits totaled a seasonally adjusted 554,000 last week.

Congressional aides in both parties who have been closely following the auto bailout discussions suggested the talk of bankruptcy could be a negotiating tactic to try to extract more hefty concessions from the companies and autoworkers unions in exchange for granting short-term loans out of a 700 billion Wall Street rescue fund.