Dec. 5 (Bloomberg) -- When the new Congress convenes in January, Senate Republican Leader Mitch McConnell will be constrained by a reduced minority and a Democratic White House. Until then, he may have as much clout as ever.

The Kentucky lawmaker, whose home state is dotted with both domestic and foreign auto plants, will play a pivotal role in determining whether General Motors Corp., Ford Motor Co. and Chrysler LLC get the additional $34 billion they are requesting from Congress to avert bankruptcy. In the current 49-51 Senate, McConnell can enlist enough of his fellow Republicans to potentially block --or pass -- any Democratic legislation.

“He’s the field marshal of the minority,” said Ross Baker, a political science professor at Rutgers University in New Brunswick, New Jersey. “And he’s in a much stronger position now. His hand is weakened once a new Congress comes into session.”

Senator Carl Levin, a Michigan Democrat who is one of the industry’s chief allies, said he holds out hope the Republican leader will support a plan to draw the funds from the $700 billion already approved for a bailout of the financial industry. That’s a position McConnell, President George W. Bush and most Republican lawmakers have so far refused to embrace.

“Once the White House and all of us, including McConnell, understand the financial impact on our markets of a failure of the Big Three, I think they’ll realize that TARP is an appropriate source of the funds,” Levin said, referring to the Treasury fund, known as the Troubled Asset Relief Program, which was approved in October to stabilize financial markets.

McConnell in Kentucky

As the top executives from the three companies testified before a Senate panel to renew their push for emergency government loans yesterday, McConnell, 66, was traveling in his home state and declined requests for interviews.

The automakers made an urgent plea for aid, as GM Chief Executive Rick Wagoner said his company needs an “immediate” $4 billion and $4 billion more next month.

“We’re here today because we made mistakes,” Wagoner told the Senate Banking Committee. “Forces beyond our control have pushed us to the brink.”

McConnell, now in his fourth term, has led dozens of efforts by his party in the last two years to block Democratic legislation on the Iraq War, oil-industry tax increases and other measures. Just two weeks ago, Senate Majority Leader Harry Reid decided not to bring up planned legislation to provide automakers $25 billion in funds under the Treasury Department’s financial-rescue program, as McConnell’s opposition signaled its likely failure.

Losing Seats

McConnell will give up some power in January, when Republicans will lose as many as eight seats in the chamber. The outcome of a recount in the Minnesota Senate race pitting Republican Senator Norm Coleman against Democrat Al Franken still hasn’t been decided.

In the auto-loans debate, McConnell supports a bipartisan compromise proposed by Levin and Republican Senator Kit Bond of Missouri that would allow the automakers to tap $25 billion in loans for fuel-efficiency investments that was approved in a 2007 energy bill.

The automakers would be able to use those funds for emergency loans. Reid and House Speaker Nancy Pelosi don’t support tapping the energy money because they want the cash used only for environmental goals.

Not Enough Support

Reid this week said he doesn’t think there are enough votes for legislation allowing the auto-aid to come from the TARP program, and he is still seeking to draw support from Republicans. The auto chiefs are scheduled to return to Capitol Hill today for a second day of testimony, this time to a House committee.

Kirk Blalock, who lobbies for Ford at the firm of Fierce, Isakowitz and Blalock, said McConnell is probably endorsing the only approach that could win passage from Congress.

“McConnell is rightfully trying to push for something that can be passed and signed by the president,” Blalock said.

In McConnell’s home state, there were about 44,500 auto manufacturing and auto parts manufacturing jobs in 2005, according to the latest data available from wardsauto.com, an industry data firm. Ford employs 5,600 at two plants in Louisville, while GM employs 2,000 at its Bowling Green Corvette plant. Japanese car-maker Toyota, meanwhile, has 7,000 workers in Georgetown.

Room to Maneuver

The mix of foreign and domestic car-makers gives McConnell more room to maneuver than Michigan lawmakers might have, said Scott Lasley, a political scientist at Western Kentucky University in Bowling Green.

Michael Franc, vice president for government relations at the Heritage Foundation, a Washington-based research organization, said McConnell is unlikely to change his mind on the use of TARP funds for the auto loans because any compromise would cause “deep schisms” in Republican ranks.

It will be easier to oppose a rescue of auto companies that made bad business decisions or have high labor costs than to reject the earlier bailout of the financial companies, he said.

“This is a cleaner issue for most Republicans than some of these earlier bailouts,” Franc said.

To contact the reporters on this story: Laura Litvan in Washington at llitvan@bloomberg.net

Last Updated: December 5, 2008 00:01 EST