In the wake of the Senate’s failure to pass auto industry rescue legislation, the White House said Friday it will consider using funds from the financial industry bailout program to stave off collapse of the automakers.

Senate Banking Committee Christopher J. Dodd , D-Conn., said Friday that he expects that the White House will “announce a course of action” within the next few days. And while only $15 billion remains of the first half of the $700 billion financial bailout money, Dodd said that amount “would appear to be to be adequate to deal with the automobile situation.”

If the administration intervenes, House Speaker Nancy Pelosi said, it should impose the same accountability and restructuring requirements that congressional Democrats negotiated with the White House in legislation that passed the House this week (HR 7321) — essentially imposing by executive action the bill the Senate blocked.

“The administration must now require, as a condition of receiving those taxpayer funds, the same tough accountability and shared sacrifice by all parties — executives, unions, suppliers, creditors, dealers, bondholders, and shareholders — mandated in the bipartisan legislation passed by the House this week,” Pelosi said in a letter to President Bush.

The House bill would have provided $14 billion in loans to domestic automakers, and put one or more executive branch officials in charge of negotiating long-term restructuring plans with the firms. If the goals of those plans were not met, or if the plans were not approved by a stated deadline, the loans would be recalled.

The White House has repeatedly refused to tap the Troubled Asset Relief Program (TARP) enacted in early October (PL 110-343). But it was forced to modify its position after the Senate failed Thursday to reach agreement on a measure providing $14 billion in bridge loans to General Motors Corp. and Chrysler LLC to keep them operating into next year. While Ford Motor Co. would have had access to the loans as well, it has said it does not need short-term financing.

“Under normal economic conditions we would prefer that markets determine the ultimate fate of private firms,” said White House press secretary Dana Perino. “However, given the current weakened state of the U.S. economy, we will consider other options if necessary — including use of the TARP program — to prevent a collapse of troubled automakers. A precipitous collapse of this industry would have a severe impact on our economy, and it would be irresponsible to further weaken and destabilize our economy at this time.”

A Treasury spokesperson said, “Because Congress failed to act, we will stand ready to prevent an imminent failure until Congress reconvenes and acts to address the long-term viability of the industry.”

Funds Dwindling

With only $15 billion of the first half of the bailout money left in reserve, the Treasury has relatively little wiggle room for extending aid to the automakers unless it moves to tap the second half of the $700 billion fund. Treasury has not indicated whether and when it might do that, and lawmakers have been indicating they would try to block the release of the money unless the department makes major changes in the way it is running the program.

It is unclear whether lawmakers would change their minds about that if Treasury needs more money to help Detroit.

Paulson could choose to extend just a few billion to tide the Big Three over until the Obama administration takes power and is able to work out a longer-term plan for helping the automakers. But that would still put some pressure on the dwindling bailout funds, as well as the ailing car companies, and Paulson would likely want to keep some significant amount of money on hand for emergencies. Just last month, Treasury had to unexpectedly pump another $40 billion in struggling insurance giant AIG.

Or Paulson could get creative, using a small amount of bailout money to underwrite a larger loan package for the automakers. There is some precedence for Treasury using bailout funds to backstop larger financial rescue efforts.