DETROIT — Sen. Carl Levin, D-Mich., said he expects a federal loan package for the auto industry to be worked out by midweek.

"The president knows the economy is fragile and that a collapse of the auto industry is not an option," Levin said yesterday.

After the loan package was scuttled by Senate Republicans last week, Levin said he expects President Bush to follow through with the deal he made with House Speaker Nancy Pelosi and transfer up to $15 billion from the $700 billion Troubled Assets Relief Program — or TARP — to the auto industry.

"And once the president makes a deal, it's not likely he'll walk away," Levin said.

The loan package's failure last week won't affect the environment in the Senate next year when Democrats strengthen their majority to at least 59 and perhaps 60 members, he said.

"It was wrong for senators to try and impose specific wages and benefits in workers," Levin said. "That's a matter for discussion over months.

"But the Senate is a place where we know we have to put those feelings behind us," he said. "We wouldn't be able to function."

Michigan Gov. Jennifer Granholm said yesterday she also expects "very, very shortly" an announcement from President Bush.

"The White House is well aware that every day that goes by is a day they are deeper in the hole," Granholm said. "There is a sensitivity to the fragility of the nation's economy, that if one of these goes down it will affect the whole economy."

Granholm said she believes the American public has become more aware of the widespread effect of the auto industry.

"I do believe people are starting to see the automobile is different than the financial sector, that it does impact small towns and large towns and every state in the country and that this industry is critical to the survival of our economy," Granholm said.

When the loan package deal is completed, Levin said he expects a somber, low-key reaction.

"This is not something that's going to have a celebratory feel," he said. "I think we'll all just breathe a sigh of relief."