Dec. 9 (Bloomberg) -- House Speaker Nancy Pelosi suggested former Federal Reserve Chairman Paul Volcker as someone qualified to become a federal czar to oversee a financial bailout for automakers.

“Somebody like Paul Volcker, who has the bipartisan confidence, and public and private confidence,” Pelosi, a California Democrat, said on NBC today when asked who President George W. Bush should name.

The Democrats’ plan would require the president to appoint a person or board to oversee long-term restructuring of the auto industry as a condition of companies receiving federal aid. The Bush administration’s own plan calls for a “financial viability adviser” to be appointed within the Commerce Department, now run by Secretary Carlos Gutierrez.

The House speaker said the czar would “proactively supervise” automakers’ restructuring.

“I would want the czar to be appointed before one dollar went out,” Pelosi said, adding that she expects legislation to be passed this week.

The House may vote as early as tomorrow on the measure that would provide U.S. automakers with $15 billion in loans, House Democratic leaders said. Some Senate Republican lawmakers said the proposal doesn’t force the industry to make the tough decisions required to turn General Motors Corp., Ford Motor Co. and Chrysler LLC around.

Restructuring

Automakers would have to submit long-term restructuring plans by March 31. The legislation requires automakers, as a condition of any loan, to abandon their lawsuits against California, New Mexico, Rhode Island and other states that have passed laws to limit greenhouse-gas emissions.

The seven-year loans would carry a 5 percent interest rate and the czar could compel early repayment if progress isn’t being made on restructuring plans. Shareholders, creditors, suppliers and dealers would work on the restructuring.

The czar is “very important,” Pelosi said today, “because, left to their own devices, it’s clear that the auto industry has not taken the initiatives.”

To contact the reporter on this story: Nadine Elsibai in Washington at nelsibai@bloomberg.net.

Last Updated: December 9, 2008 08:15 EST