"It is the only proposal now being considered that has a chance of actually becoming law," said Republican leader Mitch McConnell of Kentucky.

If an acceptable deal emerges, Reid said it could be passed as part of a measure to extend jobless aid to unemployed workers whose benefits have run out. A vote on that bill is likely on Thursday. Negotiators were discussing a scaled-down aid package of $5 billion to $8 billion to help the automakers survive through year's end.

But there was little sign that Democratic leaders would go along.

"We have to face reality," Reid said.

They are vehemently opposed to letting the car companies tap the fuel-efficiency money - set aside to help switch to vehicles that burn less gasoline - for short-term cash-flow needs.

All of which leaves the Big Three bracing for a bleak winter without government help.

GM CEO Rick Wagoner told a House committee Wednesday that the downfall of his industry would ripple through communities around the nation. Pressed by lawmakers, Wagoner wouldn't say precisely when GM would run out of money without a government lifeline, but he disclosed that the company now was burning through $5 billion a month.

Still, with the $25 billion emergency package, "we think we have a good shot to make it through this," Wagoner said.

Many lawmakers in both parties are now openly discussing whether bankruptcy might be a better option for auto firms they regard as lumbering industrial dinosaurs that have done too little to adjust their products and work forces for the 21st century.

... contd.