Retail sales sink as Dems seek auto industry loans

By MARTIN CRUTSINGER, AP Economics Writer
1 hr 23 mins ago

WASHINGTON – The worst monthly drop on record for retail sales set off new alarm bells about the economy Friday, stepping up pressure on policymakers to figure out how to combat what increasingly looks to be a severe recession. Confronting opposition by the Bush administration, Democrats in Congress said they would try next week to pass $25 billion in emergency loans for the auto industry, so wobbly that one or more of Detroit's Big Three could go under.

And the Federal Deposit Insurance Corp., also breaking with the administration, proposed having the government spend $24 billion to back mortgages and help 1.5 million Americans avoid foreclosures.