A top lawmaker predicted Washington would approve a bailout for US carmakers after they submitted survival plans, and General Motors Corp and Chrysler LLC said they needed an immediate infusion of cash to avoid failures.
US House Speaker Nancy Pelosi, a California Democrat, said Washington had little choice about helping the automakers, who say they support one in 10 American jobs.
"I believe that an intervention will happen either legislatively or from the administration," Ms Pelosi said. "I think it's pretty clear bankruptcy is not an option."
The Detroit automakers today urged Congress to authorize $34 billion in loans and credit lines, far more than the $25 billion they failed to secure in November when lawmakers demanded the companies offer plans showing they could be made "viable."
The development came on the same day that GM, Chrysler and Ford Motor Co posted a drop in combined US sales of nearly 40 per cent for November and warned that the world's largest vehicle market showed signs of tumbling further in 2009.
GM asked for $18 billion in loans and credit lines from the federal government, saying it urgently needs $4 billion of the money by the end of December to pay its bills.
Ford told Congress it needed a $9 billion taxpayer-funded standby line of credit and said a further restructuring would push it back to profitability by 2011. Ford and GM shares both gained almost 6 per cent.
Chrysler LLC, the smallest and most vulnerable of the Detroit automakers, requested $7 billion from the government by the end of this month, saying that without the aid it could run short of cash by early 2009.
The company, privately owned by Cerberus Capital Management, also said it was seeking partnerships, a strategic alliance or merger.
Democratic leaders have demanded a deep range of commitments from the automakers to cut costs and map a clear path to regain competitive footing.
Senate Majority Leader Harry Reid, a Nevada Democrat, said he would introduce a placeholder bill on Monday that could be used to help automakers.
A Congressional bailout would extend the scope of the government's crisis intervention beyond the financial sector by making it a major stakeholder in a key industrial sector.
"We're looking to make sure we do everything we can to take care of the auto industry, if in fact it's viable," Mr Reid said.
Reuters