Auto Reporter

The House approved the $25 billion in low-interest federal loans today intended for the re-tooling of the big three.

House of representatives voted 370 to 58 to approve the spending bill that includes $7.5 billion to start the loan program.

The Senate will agree to the bill this week and by the end of the week President Bush will sign it into a new law.

The new loan program is the basis for the financial backing of the auto industry, by allowing domestic manufacturers to tap into low interest loans to finance re-tooling costs.

Some lawmakers argue that this funding package is not a bailout at all. Since the loan amount still is put out with a hefty interest rate, the federal government will turn a profit no matter what.

Lobbyists have called for more lax terms in order to loosen the conditions on what the money should be spent on, however the House of Representatives have not complied to those demands.

The majority of the funds still must be used to retool production lines to manufacture vehicles, which have a 25% or higher gas mileage efficiency improvement over the model it replaces.



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