Senate Majority Leader Harry Reid, D-Nev., said earlier in the evening the plan to assist General Motors Corp. and Chrysler LLC took a different approach than the $14 billion bailout approved by the House Wednesday. That plan stalled in the Senate Thursday after Minority Leader Mitch McConnell, R-Ky., came out against it.
"A lot of struggling Americans are wondering where their bailout is," McConnell said on the Senate floor.
The failure of Democrats and Republicans to agree on a plan Thursday night effectively kills the plan and threatens U.S. carmakers with bankruptcy, The Washington Post said.
GM has hired counsel to evaluate whether to file for bankruptcy protection, The Wall Street Journal reported Thursday. GM and Chrysler have said they could run out of money by the end of the year without a government infusion of cash.
Thursday's talks centered on a proposal by Sen. Bob Corker, R-Tenn., to cut union autoworkers' pay and benefits so they would be "on par" with non-union wages and benefits. Industry sources told the Post a sticking point had to do with how much to cut union wages.
"We're not going to get to the finish line," Reid said after the plan collapsed. "That's just the way it is. There too much difference between the two sides."
Sen. George Voinovich, R-Ohio, said many Republican senators had their minds made up early.
"Whatever came out of the negotiations, they probably wouldn't support," he said.
Reid said earlier Thursday time may be running out for a bill this year.
"If there is no agreement that can be reached ... we have danced this tune long enough," he said.