Dec. 9 (Bloomberg) -- Democratic leaders backed off their prediction that Congress would approve a $15 billion automaker bailout within 48 hours, as Republican objections proved difficult to resolve.

Senate Majority Leader Harry Reid said the Senate is unlikely to vote on the measure tonight and warned that lawmakers may have to stay in session over the weekend if objections are raised to voting earlier. “Everyone should understand we’re going to work until we complete this,” Reid said.

Congressional action is likely the only chance for the aid General Motors Corp. and Chrysler LLC say they need to survive. Federal Reserve Chairman Ben S. Bernanke ruled out central bank lending to automakers and suggested options including bankruptcy reorganization.

GM and Chrysler say they need at least $14 billion in combined aid to keep from running out of cash by early next year. Ford Motor Co., which would be eligible to apply for the loans, said again yesterday it doesn’t expect to. GM and Ford shares fell.

Some Democrats said support for the bailout in is in question. “It’s not a sure thing by any means,” said Michigan Representative Sander Levin, a Democrat.

The Democratic proposal would let the president appoint a so-called car czar to oversee industry restructuring, and give taxpayers stock warrants equal to 20 percent of the loans. It would prohibit the automakers from paying dividends and owning or leasing corporate jets, and pay and bonuses would be limited.

McConnell

Senate Republican leader Mitch McConnell said the plan is flawed because it fails to ensure that taxpayers won’t be forced to provide additional aid in coming months and years.

“We should demand that management make the tough choices that are required for long-term viability,” said McConnell, of Kentucky.

White House spokeswoman Dana Perino told reporters that negotiators are making “good progress” though “we are still working through a number of issues.”

Reid said that after work is completed on the legislation, he will wait to see if the White House taps the financial-rescue package for additional aid to automakers.

House Financial Services Chairman Barney Frank, a Massachusetts Democrat, said yesterday he thought automakers would need an additional $10 billion beyond the $15 billion, which will come from Energy Department loans, and that he hoped Bush would use rescue funds for that aid.

‘Head-Knocking’

Frank told reporters today the bill would give the car czar “a great deal of head-knocking ability” with “a lot of the powers that you would get in bankruptcy.”

The official would have the power to veto participating automakers’ plans to invest abroad, Frank said. Lawmakers want to ensure the companies don’t “take American taxpayer dollars and expand in other countries rather than here, or shut down a plant in America while expanding a plant elsewhere,” he said.

Because Bush and President-elect Barack Obama are unlikely to agree on a czar, Obama will likely replace Bush’s pick as soon as he takes office, Frank said. The Bush administration has said the official should come from the Commerce Department.

Ford fell 16 cents, or 4.8 percent, to $3.22 at 2:57 p.m. today in New York Stock Exchange composite trading. GM fell 21 cents, or 4.3 percent, to $4.72.

The legislation needs 60 votes to overcome a Republican threat in the Senate to stall the measure in endless debate using a parliamentary maneuver called a filibuster.

‘Up in the Air’

Senator Robert Menendez, a New Jersey Democrat, said a package may not have the votes to pass because some lawmakers want more conditions placed on the companies. “It’s still up in the air, and the nature of conditions we impose will decide whether this is successful,” he said.

Earlier today, Pelosi said former Federal Reserve Chairman Paul Volcker is qualified to be the car czar. He has “the bipartisan confidence and public and private confidence,” Pelosi, a California Democrat, said on NBC when asked who President George W. Bush should name.

Obama last month named Volcker, 81, to become chairman of the president’s Economic Recovery Advisory Board, a new panel that will include experts from outside government and propose ways to revive growth.

Perino declined to discuss Pelosi’s suggestion.

“We don’t even have legislation yet so we’re not going to comment on rumors about personnel announcements,” Perino said.

‘Extremely Reluctant’

Bernanke said the central bank opposes lending to U.S. automakers without congressional action to aid the companies, and suggested options including a bankruptcy reorganization.

“The Federal Reserve would be extremely reluctant to extend credit where Congress has actively considered providing assistance but, after due consideration, has decided not to act,” Bernanke said in a Dec. 5 letter to Senate Banking Committee Chairman Christopher Dodd, a Connecticut Democrat.

With Obama’s Illinois Senate seat now unoccupied, the Democrats’ majority has narrowed to 50-49, including two independents. That means that even if Democrats are unified, they must attract 10 Republican votes to overcome a filibuster. The newly elected Senate, with at least a 58-42 Democratic majority, won’t convene until early January.

Some Republicans, including Senators George Voinovich of Ohio and Kit Bond of Missouri, have supported legislation to aid automakers. Voinovich and Bond last month proposed drawing on previously authorized funds meant to help GM, Ford and Chrysler retool their factories to make more energy-efficient cars. Last week Pelosi agreed, breaking an impasse with the White House.

‘Quick Passage’

GM in a statement urged “quick passage” of the bill, saying “millions of jobs, America’s manufacturing base and future competitiveness hang in the balance.”

Bruce Andrews, vice president of government affairs for Ford, said in an interview that “our plan as it stands right now is to not need any federal assistance.”

The Democratic plan will require the automakers to submit long-term restructuring plans by March 31. Automakers, as a condition of any loan, would have 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.

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: December 9, 2008 15:05 EST