An overwhelming 78-12 vote by the Senate sends a massive $634B spending bill to President Bush, who is expected to sign the measure before the government’s fiscal year-end comes to a close on Tuesday. The bill contains provisions for $25B in subsidized loans for automakers in addition to removing a ban on offshore drilling on the Atlantic and Pacific coasts. Participating companies from the auto industry would not have to begin repayment of the loans for five years and the proceeds are meant to be used in the development of more fuel efficient vehicles through new technologies and revamped manufacturing plants.

Since companies such as Ford (F) and General Motors (GM) are below investment grade, company officials argue they cannot access capital at reasonable rates which hampers their ability to compete with global giants such as Toyota (TM) and Honda (HMC). The accompanying tables contain an overview of my Global Auto Index, which declined by over 26% on an equal-weight basis and 13.5% on a market cap-weight basis over the past year (all stats are through 8/8/08) for the 39 companies. Of the top companies by largest market cap, only Volkswagen showed a gain over the past year with an industry-best stock price increase of 45% as industry leader Toyota lost nearly one-fourth of its market value.

The Defense Department will receive $488B (a 6% increase), which is in addition to $70B already approved this past summer to fund operations in Afghanistan and Iraq. Meanwhile, Congressional leaders are working through the weekend with the goal of finalizing a deal by 6 p.m. on Sunday evening before the Asian markets open for trading. Such a plan could cost taxpayers as much as $700B, but is widely seen as necessary to remove bad debts from the financial system and allow the credit markets to function normally and avoid an economic depression.