Car Crash

Senate Republicans Block Auto Bailout

Rejection unnerves markets and plunges Detroit into gloom.

The auto bailout is dead, causing the nervous markets to head south. "It's over with," said Senate Majority Leader Harry Reid. Democrats and Republicans seemed near a deal several times, but talks eventually broke down with the Republicans' insistence that automakers reach wage parity with foreign automakers by 2009. The vote failed 52-35, eight votes short of the 60 needed to break a Republican filibuster. Automakers now hope the White House will relent on its refusal to allow the Treasury to provide emergency loans from the $700 billion Wall Street bailout. Both GM and Chrysler are consulting bankruptcy lawyers. The news spells a rocky day on Wall Street: domestic market futures dropped following skids in Europe and Asia.