House approves $25 billion in direct loans for auto industry
The House of Representatives yesterday approved $25 billion in direct loans to help the auto industry comply with stricter gas mileage standards.
The loans will assist automakers in meeting fuel-efficiency standards set in last year’s energy bill that push fleet standards up to at least 35 miles per gallon by 2020. The funds can be used to retool older plants and help companies create advanced batteries and new hybrid technologies. Auto suppliers will also be eligible for the loans, and since they’re coming from the federal government, they’ll have lower interests than most private sources.
The direct loan program was created under the 2007 energy legislation but not funded by Congress. The Senate and the White House are expected to sign off on the bill before the end of the week. Companies would apply to the Energy Department for a loan, but there currently aren’t standards in place for how the loan requests would be reviewed. The House calls for the rules to be written within 60 days of the final passage of the bill.