The White House said it was in discussions about a proposal to give the auto industry $25 billion in government-issued low-cost loans and a sign that automakers may be making progress in their effort to get financial assistance.

Dana Perino the White House spokeswoman said “it’s something we’re aware of and we’re talking to the members of Congress and also the people in the auto industry, and thinking about what they might think would be required from their perspective.” Dana Perino said she was not prepared to say what funding amount “the White House would or would not support.” She also said the White House may say whether it supports the proposal in the next day or two.

Energy bill that was signed into law by President Bush included a provision to provide $25 billion in direct loans to automakers but the bill didn’t allocate any funding and it would cost $3.75 billion to guarantee that money. Detroit’s automakers and the United Auto Workers argue a $50 billion package may be necessary and which would cost $7.5 billion to guarantee. Automakers could use the money to retool plants to build advanced technology vehicles that were at least 20 percent more fuel-efficient than the minimum required

Obama is running advertisements tweaking McCain’s support of the smaller package and Michigan is an important state in the presidential election. Barack Obama is the Democratic presidential nominee that has endorsed the $50 billion package and while his Republican rival John McCain endorsed the $25 billion package.

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