Nov. 19 (Bloomberg) -- Democratic congressional leaders and the Bush administration are deadlocked over how to provide $25 billion in aid to the automobile industry with time running short to reach a compromise.

Senate Majority Leader Harry Reid held out little hope that Congress could reach agreement on a plan. ``We have to face reality,'' he said on the Senate floor. ``The reality is we tried a number of different approaches.''

Reid blocked consideration of the Republican plan, and Republicans refused to permit consideration of Reid's proposal.

Senate Republican leader Mitch McConnell urged lawmakers to let automakers shift previously approved loans intended to promote fuel efficiency for day-to-day operations instead. ``It is the only proposal now being considered that has a chance of actually becoming law,'' the Kentucky Republican said.

``There will be a great deal of resistance in the House'' to redirecting those loans without environmental safeguards, said House Financial Services Chairman Barney Frank, a Massachusetts Democrat.

Support has waned for a Democratic plan to help the automakers with funds from the recently approved $700 billion bank-rescue package. The idea is opposed by President George W. Bush and Senate Republicans, making it unlikely there are enough votes to overcome a presidential veto.

The impasse raised the possibility that automakers might not get aid in the lame-duck session scheduled to wrap up in two days. House Speaker Nancy Pelosi has said she doesn't plan to call lawmakers back in December to consider auto aid.

Plan in Limbo

The disagreement leaves uncertain how much aid automakers may receive. The Democratic plan would give them $50 billion -- the $25 billion in already approved efficiency loans and an additional $25 billion from the rescue package. McConnell's plan would give them only the first $25 billion.

``We're shooting for something done this week,'' Senator Carl Levin, a Michigan Democrat, told reporters. While there is disagreement on the source of funds, ``there is a majority in both houses that support bridge loans with conditions,'' he said.

General Motors Corp. Chief Executive Richard Wagoner, Ford Motor Co.'s Alan Mulally and Robert Nardelli of Chrysler LLC returned to Congress for the second straight day to renew their appeal for funds before the House Financial Services Committee.

``We had a chance to make our points,'' Wagoner told reporters as he walked down a corridor after the hearing. He didn't stop for questions.

Stock Falls

GM tumbled 30 cents, or almost 10 percent, to close at $2.79 in New York Stock Exchange composite trading, while Ford slid 42 cents, or 25 percent, to $1.26.

White House spokeswoman Dana Perino endorsed the Republican plan today and urged its passage. ``If the Congress fails to act, the most logical interpretation would be that they don't agree that an additional $25 billion needs to be given to the auto industry,'' she said.

In response, Reid, a Nevada Democrat, said the White House has authority to funnel the financial-rescue money to car companies without congressional action.

``No one should be overly concerned if we are unable to reach agreement,'' Reid said in a statement. ``It will still be up to the White House and the Treasury Department to take the steps that I believe are necessary.''

Seeking Agreement

Republican Senators Kit Bond of Missouri and George Voinovich of Ohio were working to reach an agreement with Democrats to use the fuel-efficiency aid, McConnell said.

``We are having a lot of discussions,'' Voinovich said. Democrats are ``sensitive'' to Pelosi, a California Democrat, who doesn't favor the approach, he said.

``If we don't have something today, everybody is going to pack their bags and take off,'' Voinovich told reporters.

Wagoner, when asked at the House hearing about the proposal to use the efficiency dollars for general liquidity, said, ``It could work.''

GM, the biggest U.S. automaker, said Nov. 7 it may run out of operating cash as soon as this year and will be ``significantly short'' of its needs by mid-2009 without new money or a turnaround in the auto market.

Payment Terms

Deutsche Bank said GM's plight may worsen should ``suppliers become uncomfortable with shipping parts on extended payment terms.''

``Without fresh capital, we project that GM may not have sufficient liquidity to make it to year end,'' Deutsche Bank AG analysts including Rod Lache in New York wrote today in a note to investors.

Himanshu Patel, a JPMorgan Chase & Co. analyst in New York, said in a note to investors that, while he still expects the industry to receive some form of financial rescue, ``the timing of any such aid is not imminent.''

Representative Spencer Bachus of Alabama, the top Republican on the House Financial Services panel, said he can't support taxpayer dollars for automakers. ``It is a fairness issue,'' he said, adding the ``vast majority'' of his constituents don't earn ``anything near'' what Big Three workers get.

Private Jets

Representatives including Democrats Gary Ackerman of New York and Bradley Sherman of California criticized the auto chiefs for taking private jets to Washington to plead their case.

``Couldn't you all have downgraded to first class?'' Ackerman said. Added Sherman, ``I don't know how I go back to my constituents and say the auto industry has changed.'' The auto chiefs didn't talk about their jet use in response.

Representative Peter Roskam, an Illinois Republican, challenged Wagoner and Mulally to essentially forgo pay for a year, as he said he understood Nardelli was willing to do.

Wagoner said he had ``no position'' on that. Mulally said, ``I think I'm OK where I am.''

Wagoner got $14.4 million in compensation in 2007, including a salary of $1.56 million. Mulally received $21.7 million for 2007, including $2 million in salary.

Catastrophic Failure

Wagoner for the second straight day said automaker failures would be ``catastrophic'' for the U.S. economy. ``Our industry needs a bridge to span the financial chasm that has opened before us,'' he told the House panel.

Mulally added, ``We face serious problems in our economy, and the auto industry has been among the most heavily affected by the turmoil in the financial markets.''

GM needs $10 billion to $12 billion, Wagoner said, and Chrysler is seeking $7 billion, Nardelli told the House panel. Ford needs $7 billion to $8 billion, Mulally said yesterday.

The aid should give GM ``a good shot'' at getting through next year, Wagoner said.

It would also remove much of the urgency for the Big Three to make tough restructuring decisions, said Representative Michele Bachmann, a Minnesota Republican.

``It's easy to predict that you will be back at the taxpayers' trough in no time, at the rate that money is being burned in Detroit,'' she said.

To contact the reporters on this story: John Hughes in Washington at Jhughes5@bloomberg.net; Nicholas Johnston in Washington at njohnston3@bloomberg.net.

Last Updated: November 19, 2008 18:32 EST