Citing "people close to the discussions," the New York Times reports that the Treasury Department denied General Motors' request for $10 billion in financing to help facilitate a proposed merger with Chrysler.

According to the article, GM was told on Friday that the focus of the Bush administration in its closing days would be on accelerating $25 billion in loans approved by Congress in September and administered by the Energy Department for the development of fuel-efficient vehicles.

Apparently the Treasury Department has proved reluctant to broaden the definition of the targets of the $700 billion rescue program to include industrial companies, but it is unknown if this reluctance also was indicative of a desire not to take moves that would be at variance with the goals of a new presidential administration.

In recent days Senator Barak Obama has indicated his support for increased aid to auto companies. Senator John McCain has not discussed such aid, beyond the existing $25 billion for fuel-efficient vehicle development. Movement on the matter may be stimulated after Tuesday's election.

In the meantime, GM and Chrysler are continuing to discuss the potential merger, but potential investors have proven to be reluctant to support the deal in the absence of federal aid. The Bush administration, rapidly advancing into deeper lame duck status, has said it continues to consider a range of options, but it is unclear if any measure short of outright loans will shore up the merger talks.