Congress should be highly skeptical of yet another federal bailout — this time for the U.S. auto industry.

The Senate this week is debating a $25 billion emergency loan package to pull Chrysler, Ford and General Motors off the road to bankruptcy. The U.S. automakers are bleeding billions of dollars each quarter because of weak sales and high overhead. Without federal aid, analysts say, the companies are in danger of running out of cash next year.

The industry is without doubt critical to the nation's economic health. Millions of workers and hundreds of communities rely on the Detroit automakers to keep their fiscal engines in tune.

Yet the Big Three already have been promised one $25 billion handout this fall — to help meet fuel efficiency requirements. Now they want another.

There's also serious question about whether the money would be enough to save the companies from eventually having to reorganize through bankruptcy filings. The national recession could get worse in the months ahead, dragging down sales even further and driving up the automakers' losses.

The companies also have structural problems that make their longtime viability suspect, including high legacy costs (pension and health-care benefits), inept management and out-of-favor product lines. Federal handouts won't resolve those issues.

Although painful, bankruptcy would force the companies to shake up senior management and confront out-of-line expenses. Industry analysts, however, warn that, unlike with other industries, the bankruptcy route could prove fatal to automakers because consumers would shy away from buying vehicles out of concern about coverage of warranties and repairs.

But at some point Congress must say no to additional handouts. The current federal deficit and the long-term national debt are soaring. The consequences of those trends could cripple the nation if not brought under control.

After the federal rescue of the banks, can Washington realistically turn away another vital industry? The key difference is that the goal of the financial services bailout was to thaw out the credit markets, a move designed to help other industries, including automakers.

In contrast, the bailout for carmakers would be little more than an expensive patch, one that does nothing to resolve deeper problems within the industry.

Any money that does flow from Washington to Detroit must have tight and strong strings attached. The U.S. automakers need an extensive overhaul, one that a simple infusion of cash won't complete.

REPRINTED FROM THE INDIANAPOLIS STAR.

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