WASHINGTON -- Negotiations on an auto-industry bailout failed in Congress this week in part because the United Auto Workers union refused to agree to senators' demands for immediate wage cuts. Now, the union must hope for a more sympathetic reception from the President George W. Bush administration.

White House officials said Friday they're considering issuing loans to the auto makers from the $700 billion financial rescue program -- with tough conditions for the companies, their debt holders, and union workers. Treasury Secretary...