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.

The U.S. automakers is still dependent on pickups and sport utility vehicles and likely gave up more of their home marker again as their shrinkage eclipsed that of Japan’s car focused Toyota Motor Corp. and Honda Motor Co.. General Motors Corp. and Chrysler LLC probably led a drop in U.S. auto sales last month as new buyer incentives failed to stem an industry slide that began December.

August rate was 13 million based on a survey of analysts and economists. Offering employee discounts to all customers and no-interest loans may have kept results from falling to July’s 15-year low, when new vehicles sold at an annual rate of 12.6 million and a decline would extend the industry’s slump to nine months.

Jeff Schuster, chief of global forecasting for consumer research firm said “we would expect things to be worse for the month if it were not for the significant incentives.” General Motors the largest U.S. automaker is probably will say sales slid 29 percent and while Chrysler’s may have plunged 34 percent and Ford Motor Co.’s by 21 percent based on the 5 analysts’ estimates.

George Pipas sales analyst of Ford said “we’re in a very difficult period right now,” and also said Dearborn, Michigan-based Ford’s sale is likely to be close to July’s 15 percent decline. Automakers had to contend with the weakening U.S. economy. The Labor Department will say Sept. 5 that August non-farm payrolls fell by 75,000 jobs.