David Shepardson / Detroit News Washington Bureau

Washington -- The U.S. House of Representatives approved a spending bill late Thursday that includes a provision that seeks to reverse the closing of 789 Chrysler Group LLC dealers and the planned closing of more than 2,000 General Motors Co. dealers.

The legislation was approved by a 219-to-208 vote. One member voted present.

GM said it would work with Congress to resolve the issue.

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"We continue to work closely with Congress on a solution that allows us to move forward as a new GM with a dealer network to match," GM spokesman Greg Martin said. "We hope the dealers share a similar commitment and will join us at the table to resolve this issue."

House Appropriations Committee chairman David Obey, D-Wis., strongly backed the provision, noting that GM and Chrysler have received billions in loans, $1 billion for a "Cash for Clunkers" program, $2 billion in battery research funding and $300 million for the federal government to buy new advanced technology vehicles.

"This Congress has provided $60 billion in funding to the auto industry. I think that somehow to suggest that they have been abused ... is in my view off the point," Obey said. "I hardly think they have been underprivileged in terms of their treatment by this Congress."

Obey said dealers are entitled to a "decent review process, a decent appeals process."

Obey said the language in the bill will change when the House and Senate negotiate over the legislation, but he said it was written as a lever to force the automakers and dealers to "sit down and work out a better appeals process."

Rep. John Dingell, D-Dearborn, said the bill could "jeopardize" the recovery of both GM and Chrysler and the taxpayer funds invested in the automakers and lead to a "serious disaster."

"If the auto industry goes down because we have taken sides in a quarrel between the auto industry and the dealers, we will have destroyed not only the dealers that complain, but all of the other dealers," Dingell said on the House floor. "We are playing with fire here."

Late Thursday, Chrysler's Peter Grady, vice president for network development and fleet, issued a defense of the company's actions that largely consisted of noting that U.S Bankruptcy Judge Arthur Gonzalez had approved the dealer closings.

"If Congress reverses this process, it flies in the face of a U.S. vehicle market that has declined 40 percent since 2007. Indeed, the U.S. dealer network was built to serve a market that once sold 16 million vehicles a year. Those days are gone," Grady said in a statement. "There are simply too many dealers for not enough sales. When there are too many dealers in an area each dealer is less profitable and that means a reduced ability to invest in the business, risking a negative customer experience. You only get one chance at a first impression."

Passage of the bill in the House sets the stage for a battle in the Senate, where the fate of the legislation is uncertain.

The White House has strongly opposed the effort to hamstring GM and Chrysler's efforts to slim down their dealer networks.Sen. Majority Leader Harry Reid, D-Nev., said he wasn't inclined to take up the dealer bill, but 25 senators have signed on to a Senate version.

Rep. Steve LaTourette, R-Ohio sought to restore the dealer agreements last week when he attached an amendment to the spending bill that was passed by the House Appropriations Committee.

Chrysler shut down 789 dealers on June 9. GM sent closing notices to 1,340 dealers, but has reversed those decisions on appeal in 70 instances. GM expects another 1,250 dealers will voluntarily close by the end of next year. GM has given closing dealers until late 2010 to sell off inventory and cash payments of up to $1 million each.

Chrysler had no appeal process and did not reverse any closings. It offered no cash and gave dealers just 26 days to close their doors.

"We will not as taxpayers in this country give billions to General Motors and Chrysler until they come to terms with the hundreds of thousands of people they have put out of work," LaTourette said Thursday on the House floor.

The National Automobile Dealers Association says closing the dealers could result in 170,000 job losses nationwide. But the automakers say it is imperative they reduce their dealer networks to ensure remaining dealers are more profitable. They also say the cuts will reduce their costs.

GM and Chrysler have received about $65 billion in taxpayer loans. The companies had the ability to cancel dealer agreements because they both were in bankruptcy protection. Bankruptcy law gives companies wide latitude to terminate previous business contracts.

LaTourette said the closings are the result of "the goofy action of an unelected task force and now the car companies taking advantage."

The Obama administration forced both automakers into bankruptcy after the White House rejected the automakers' restructuring plans.

Rep. Shelia Jackson Lee, D-Texas, criticized the closings, calling them an "atrocity."

"Let us get Chrysler and GM at the table to restore the ownership of these dealerships ...," she said. "Get these car dealers back doing their jobs."

A lawyer for Chrysler dealers facing closure as part of the automaker's bankruptcy reorganization said on Tuesday he believes Chrysler executives do not support a plan to eliminate a quarter of its retail outlets.

Lawyer Leonard Bellavia, of Bellavia Gentile & Associates, who represents some of the terminated dealers, said he deposed Chrysler President Jim Press on Tuesday and came away with the impression that Press did not support the plan.

"It became clear to us that Chrysler does not see the wisdom of terminating 25 percent of its dealers," Bellavia said. "It really wasn't Chrysler's decision. They are under enormous pressure from the President's automotive task force."

What does the rule of law have to do with anything that is happening in the U.S. government at this time?