WASHINGTON -- Democratic leaders in Congress sidetracked legislation to bail out the auto industry Thursday and demanded the Big Three develop a plan assuring the money would make them economically viable.

"Until they show us the plan, we cannot show them the money," Speaker Nancy Pelosi, D-Calif., said at a hastily called news conference in the Capitol.

Instant Feedback: Dems Postpone Bail Out Vote

She and Senate Majority Leader Harry Reid, D-Nev., said Congress would return to work in early December to vote on legislation if General Motors Corp., Ford Motor Co. and Chrysler LLC produce an acceptable plan.

The decision averted a likely defeat of legislation providing $25 billion loans for the industry. Reid and Pelosi said there was no plan in circulation that could pass both houses of Congress and win President George W. Bush's approval.

While the decision headed off the defeat of one bill, it did not necessarily translate into passage of a different one.

“It's disappointing as I said. Obviously we wanted this to be voted on today we thought we had the votes. But the Senate Majority Leader said the votes were not there. He may be in a better position than we are. He said he supports the industry and yet he said the votes were not there for the plan today,” said Sen. Carl Levin, D-Mich. Sen. George Voinovich, R-Ohio., shared his colleagues sentiments in an emergency news conference.

As a result, the fate of hundreds of thousands of auto workers and even of an iconic American industry hang in the balance.

The chief executives of the Big Three automakers appealed personally to lawmakers for the loans this week, and warned that their industry might collapse without them. In testimony, they said their problem was that credit was unavailable, and not that they were manufacturing products that consumers had turned their backs on.

But whatever support they found sagged when it became known that each of them had flown into Washington aboard multimillion dollar corporate jets. Reid observed that was "difficult to explain" to taxpayers in his hometown of Searchlight, Nev.

I know it wasn't planned but these guys flying in on their big corporate jets doesn't send a good message to ... anybody in this country," said Senate Majority Leader Harry Reid.

The automakers are on a tight timeline. Reid and Pelosi said their plan must be turned over to key lawmakers by Dec. 2.

They said hearings were possible the first week of December, and Congress may return to session the following week to consider legislation.

Pelosi stressed that whatever the Big Three provided to Congress, it must show they had a plan for "viability and accountability," meaning that the were transforming their industry in a way that it would become competitive, and that they were clear about how the federal loan money was used.

Ford released the following statement about Thursday's events.

"Ford welcomes the opportunity to provide our plan to Congress. We have a great plan that will continue Ford's transformation into a lean, profitable company that delivers the safe, fuel-efficient, high-quality new products that our customers want and value."

Even if lawmakers return to vote, they are likely to insist on numerous conditions on any loans. One possibility is to seek a partial ownership of the companies. Another is to limit salaries of top executives. A third is to prohibit use of the funds for any lobbying.

Until Democratic leaders reached their agreement, the bailout had appeared headed for defeat in Congress, with the fate of hundreds of thousands of workers and Detroit's once-venerable car companies in the balance.

Reid canceled plans for a vote on a bill to carve $25 billion in new loans out of the $700 billion Wall Street rescue fund. The Bush administration and congressional Republicans oppose that plan. They prefer tapping a different source of funds that is earmarked to help the industry produce vehicles that burn less gasoline. But using those funds drew opposition from Pelosi, as well as environmentalists.

Efforts on a compromise unfolded earlier in the day, and a small group of legislators from automotive-industry based states circulated a proposal that would divert the fuel-efficiency money to cover the industry's short-term financial needs, while guaranteeing that account would ultimately be replenished.

The loans would be paid back in installments, immediately after the funds are released, similar to a home equity line of credit.

Negotiators were discussing a scaled-down aid package of $5 billion to $8 billion to help the automakers survive through year's end.

Local 4 has learned that although the bill requires companies to submit extensive turnaround plan, the bill does not call for the removal of the Big Three CEOs.

With all sides sensing doom for a Big Three automaker rescue, the finger-pointing proceeded.

White House press secretary Dana Perino on Thursday blamed Reid for not allowing the Republicans' separate auto-aid plan to come up for a vote.

"Unfortunately it looks like Sen. Reid just wants to pick up his ball and go home for the next two weeks -- two months -- for vacation," she said.

Pressed on what the White House would do if Congress can't agree on a plan to rescue the automakers this week, Perino said she thought lawmakers would return after the Thanksgiving holiday for an emergency legislative session if an auto company was in imminent danger of collapsing.

"I can't imagine a scenario where they wouldn't come back, unless the answer is that they just don't care. And if that's the case, then the American people ought to know that," she said.

Congressional Democrats countered that the Treasury Department already had the power to grant emergency funds to the automakers, but the Bush administration opposed the approach.

"Unfortunately, the sad reality is that no one's come up with a plan that can pass the House and Senate and get signed by president Bush -- No matter how hard Senator Levin and the others have worked and they've worked very very hard," said Reid.

The leaders of the Big Three automakers painted a grim picture of their financial position during two days of congressional hearings, warning that the collapse of the auto industry could lead to the loss of 3 million jobs. Detroit's automakers, hurt by a sharp drop in sales and a nearly frozen credit market, burned through nearly $18 billion in cash reserves during the last quarter -- about $7 billion at GM, almost $8 billion at Ford and $3 billion at Chrysler. GM and Chrysler said they could collapse in weeks.

"I don't believe we have the luxury of a lot of time," GM CEO Rick Wagoner told a House hearing.

Voinovich shared Wagoner's fears.

"If we don't get this done, I believe we are going to have a deep recession quite frankly, and from what I can pick up, we might just go over the cliff," he said.

Alan Mulally, the CEO of Ford Motor Co., said the company had enough cash reserves to make it through 2009. But United Auto Workers union president Ron Gettelfinger said a bankruptcy could spawn others.

"If there's a Chapter 11 (for) one of the companies, it will drag at least one other with them, if not all of them. And I do not believe Chapter 11 is where it will end. It will go to liquidation," Gettelfinger said.

Wagoner said he does think something positive came out of Thursday.

"Well I think just about everybody who spoke today, whether it was in the first press conference or the second press conference, clearly indicated a strong view that bankruptcy was a very bad idea for this industry and very risky for the whole country," said Wagoner. One of the things that I think was certainly accomplished this week was a good understanding in the congress among many people, and I can't speak for them all but, this is something to be avoided at all costs and we, certainly, at GM are going to do everything we can to make sure we're not put in that situation," he said.

Michigan Gov. Jennifer Granholm shared Wagoner's sentiments.

“It is clear that both the U.S. House and Senate are unwilling to allow the companies to go into bankruptcy. They recognize, as I do, that far too many workers and businesses depend on this critical sector of our economy. I am encouraged that the U.S. automobile companies will have another opportunity to tell Congress and the American people how they will lead this nation to a future of energy independence which will ensure national security and job creation.”

Automakers ran into more resistance from House lawmakers, who chastised the executives for fighting tougher fuel-efficiency standards in the past and questioned their use of private jets while at the same time seeking government handouts.

"My fear is that you're going to take this money and continue the same stupid decisions you've made for 25 years," said Rep. Michael Capuano, D-Mass.

The stakes are high. The Detroit automakers employ nearly a quarter-million workers, and more than 730,000 other workers produce materials and parts that go into cars. About 1 million more people work in dealerships nationwide. If just one of the automakers declared bankruptcy, some estimates put U.S. job losses next year as high as 2.5 million.

“To fundamentally have a middle class in this country we need to support the people who started the middle class -- the automakers,” said Sen. Debbie Stabenow, D-Mich.

In an interview with Local 4 Thursday evening, Levin said it is now up to the auto companies to supply the plans that will revive their companies.

"They're going to have to submit those to Congress, do it promptly, have those hearings on Dec. 7 and hopefully get this approved that week if things go OK," he said.

Levin said the Big Three have had perception problems and it's been a rough week for both the city of Detroit and the state of Michigan, but remained optimistic.

"The Big Three have had perception problems that a lot of people around here (Washington) still act as though we're making cars with the kinds of problems we saw exist in the 1970s," he said. "They don't recognize that quality now is better than Europe and equal to Japan. They don't recognize the givebacks the union members have given. They don't see this new reality."

Levin said he'll keep "slugging away" for the automakers and said he hopes a positive outcome will result for everyone.