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House Signs Off on Auto Loans, Lets Drilling Ban Expire

 
Matt Egan
FOXBusiness
     

    A hurdle in Detroit's efforts to obtain $25 billion in loans from the federal government was cleared on Wednesday when the U.S. House of Representatives passed a massive spending package that will also lift a ban on some offshore drilling.

    Detroit’s Big Three car companies-- General Motors (GM), Ford (F) and Chrysler LLC -- have sought funding to produce more fuel-efficient vehicles. The billions in low-interest loans would also likely help the cash-strapped auto makers deal with one of their toughest periods in recent memories.

    The auto giants have seen their sales plunge this year as gasoline prices briefly eclipsed $4 a gallon nationally, lowering the nation’s appetite for gas-guzzling SUVs and trucks. Low consumer sentiment has weighed on sales even as auto makers have offered incentives like low-interest financing.

    The $700 billion temporary spending bill, which was needed to keep funding the government through March 2009, is expected to pass in the Senate before the fiscal year ends on Sept. 30.

    After months of partisan battling about offshore drilling, the House voted in favor of allowing the 26-year moratorium to expire at the end of the month. President Bush threatened to veto the spending package rather than let it pass without lifting the offshore drilling ban.

    While the ban will likely be lifted, no new drilling is expected just yet as Congress will likely revisit the hot topic after the election. Still, allowing the offshore drilling ban to be lifted reflects the changing sentiment in the country as crude-oil prices touched record highs earlier this summer.