Treasury Department Prefers To Speed Up $25 Billion Loan To Make Fuel-Efficient Cars Than $10 Billion Loan For GM-Chrysler Merger

Washington, D.C. (AHN) - There is more to what appears to be a bias for green vehicles in the decision by the U.S. Treasury to speed up a $25-billion loan program to manufacture fuel-efficient cars over $10-billion loan for the planned merger of General Motors with Chrysler.

According to the New York Times, the different plans of the Democratic and Republican candidates for the presidency may have something to do with the Treasury's reluctance to include industrial firms in the $700-billion financial rescue package. Democratic candidate Sen. Barack Obama is in favor of assisting auto manufacturers, while Republican candidate Sen. John McCain had not indicated if he is willing to support the car making industry beyond the $25-billion package.

The two car makers are still talking, but GM and Chrysler are not expecting any deal until the incoming administration is identified and gives its clear position on the matter. In turn, potential investors in the merger are waiting for more indicators from politicians before they plunk in money.

GM chairman Rick Wagoner has asked the Treasury to include vehicle manufacturers in the bailout program. Aside from the car manufacturing industry, politicians too have added to the pressure to help the sector. Aside from Obama, the governors of Michigan, Ohio, Kentucky, Delaware, New York and South Dakota has written Federal Reserve Chairman Ben Bernanke and Treasury Secretary to seek federal financial support for the industry.

South Dakota Gov. Michael Rounds told Bloomberg TV, "We should not leave the automakers out... They are a critical part of our economy. They have an impact on every single state in the United States."