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The U.S. House on Wednesday approved $25 billion in loans for the troubled U.S. auto industry, as Michigan lawmakers hailed the plan as key toward saving thousands of jobs in the state and vowed to press for an additional $25 billion next year to boost the industry's retooling.
Michigan lawmakers vowed that unlike the Wall Street plan, automakers would pay back the government's money.
"There are those who will lump it in with the bailouts. That's garbage," said Rep. Joe Knollenberg, R-Bloomfield Township. "I know people are still saying it -- I hear it every time I walk down the hall."
The legislation culminates a more than two-year effort to help cash-strapped automakers and parts suppliers gain access to credit, and gives a big boost to automakers, which need billions of dollars to develop fuel-efficient vehicles and modernize the factories that will build them.
The $25 billion loan program was authorized in an energy bill approved in December that also hiked fuel efficiency standards by 40 percent and was intended to help automakers meet the new mandates, but Congress never funded it. Without the low-interest loans, Detroit's Big Three face double-digit interest rates to borrow money conventionally. The program will offer rates between 4 percent and 5 percent, saving automakers more than $100 million per $1 billion borrowed.