The White House has said it is considering using some of the $700bn fund it set up to bail out the country's financial sector to prevent a collapse of the big US car makers.
White House spokeswoman Dana Perino was speaking to reporters aboard Air Force One as President George W Bush headed to Texas.
The move comes after a proposed bail-out of General Motors, Chrysler and Ford failed in the Senate last night, raising the prospect of the industry's collapse.
The White House said the US economy could not withstand a 'body blow' such as the disorderly bankruptcy of car firms.
Last night, the US Senate failed to pass a $14bn (€10bn) rescue package for Detroit's three major car manufacturers.
General Motors Corp and Chrysler LLC are seeking billions of dollars in immediate aid, while Ford Motor Co wants a hefty line of credit.
Supporters of a bailout had said the Bush administration's Treasury Department should dip into the $700bn fund Congress created to help Wall Street firms and banks, and lend automakers the money they need to avoid bankruptcy and save millions of jobs.
The Senate came only a few Yes votes short of the 60 needed to block a filibuster on the bailout bill, effectively killing any chance of Congress providing a lifeline to the financially drowning automakers this year.
'It's going to be a very, very bad Christmas for a lot of people based on what takes place here tonight,’ Senate Majority Leader Harry Reid told his colleagues before the vote.
Markets across the Asia-Pacific region were down more than 3% after news the talks had collapsed, with Japan's Nikkei average and Hong Kong's Hang Seng both down more than 5%.
US crude oil prices fell more $2 toward $45 a barrel on news of the bailout bust.
Senators negotiated late into the night on a possible compromise that participants said fell apart over proposed wage concessions by the powerful United Auto Workers union.
Senator Christopher Dodd, a Connecticut Democrat, said the main issue of disagreement was the date to require the Detroit autoworkers' pay parity with foreign-based US car manufacturers.
The industry is reeling from depressed sales, made worse by the credit crunch and the recession and GM and Chrysler said government intervention was required now to avert potential failure.
The House of Representatives passed its version of a Democratic-sponsored bailout on Wednesday, but Senate Republicans rejected that measure.
