By late Monday night, a rescue for the nation's ailing automakers was looking a lot more likely. Democratic House leaders released the draft of a new plan and White House officials, though raising some objections, indicated that agreement on a package was close. Senate Democrats remained nervous that they might not yet have the votes in their chamber, where it would take 60 votes to break a Republican filibuster. But Wall Street signalled its optimism by jumping on stocks for Ford (up 24 percent) and General Motors (up 21 percent).

I had a chance read through a draft of the proposal and then talk it over with a few people involved with the discussions. There's still a fair amount of confusion out there--apologies if anything I am about to say turns out to be inaccurate--but the essential elements seem to be pretty straightforward.

The government will make up to $15 billion in loans available to the industry right away--enough, presumably, to keep Chrysler and General Motors from shutting their doors in the next few months. (Ford, which is in better shape financially, may not need loans at all.) By March 31, the companies would have to submit detailed restructuring plans that follow up on the outlines their executives offered in their testimony last week.

If they met that deadline and provided satisfactory plans, they could perhaps get more loans as necessary--although it's not clear (to me or to my sources) whether that would require Congress to authorize the money. If the companies failed to submit satisfactory plans, then they couldn't get more money and would have to pay back what they could, a move that would presumably trigger bankruptcy.

And who would decide whether the plans were "satisfactory?" Ah, that's where it gets interesting. The Democrats had originally proposed to create an oversight board, perhaps composed of officials from various cabinet agencies including Commerce and Energy. The Bush Administration preferred to appoint a single overseer--that is, an auto "czar."

The Democrats--many of whom worried that creating and convening such a board would take too much time--agreed to go with the administration's preference, at least for now. The proposal specifies that the president "designate one or more officials from the Executive Branch having appropriate expertise in such areas as economic stabilization, financial aid to commerce and industry, and financial restructuring, energy efficiency, and environmental protection ... to carry out the purposes of this Act, including the facilitation of restructuring to achieve the long-term financial viability of the domestic automobile manufacturing industry." 

The widely held assumption is that Bush would appoint a single individual, not several. Under the proposal, the overseer would have power not only to command a staff and compel meetings of stakeholders, but also to set the benchmarks for the automakers' performance and ultimately to judge whether the automakers are meeting those benchmarks. In other words, if I'm reading this right, this administrator would have the authority to decide how we should judge the automakers' progress in restructuring--and then, as the effort proceeds, to make those judgments on his or her own.

This aspect of the rescue package doesn't seem to be getting a whole lot of attention right now. Instead, most people are focussing on the other, more publicized areas of controversy--like where the money will come from (Speaker Nancy Pelosi agreed to take it out of a fund for green re-tooling, as long as there was a guarantee the money would be replenished quickly) and what kind of oversight to allow (the administration seems to be going with the Democrats' preference, which would allow total access to company books).

But, as far as I can tell, establishing the right standards for measuring the companies' restructuring progress might be an equally, if not more, critical issue. As scholars Susan Helper and John Paul MacDuffie argued here a few days ago, it's important the companies forge more constructive relationships with suppliers and maintain the more cooperative labor-management arrangements that have been evolving, rather than simply maximize short-term gains (which, believe it or not, is something companies like GM seem to do too much already). 

Will this proposal make such progress possible? Perhaps. In the end, it would really depend on Congressional Democrats--and President-Elect Obama--providing enough oversight. The administrator (or administrators) would report to Congress every 15 days. And this person or persons would serve "at the pleasure of the president"--meaning Obama could always replace him or her (or them) if necessary.

Otherwise, the package includes what has become boilerplate langugage for bailouts--equity for taxpayers, limits on executive compensation, and so on. The Wall Street Journal has a nice summary here. The Journal's writeup notes one interesting condition: The Democrats' package stipulates that the automakers have to drop lawsuits against states trying to impose stricter emissions standards. It's one of several provisions--including a requirement that the automakers formally report on their potential to use excess capacity for producing mass transit vehicles--designed to encourage a shift towards more energy efficient production.

--Jonathan Cohn