White House: Auto bailout worked, but we’ll still lose money
One year ago the U.S. auto industry was at its weakest point in history. To make matters worse for the both the industry and the Obama Administration, the majority of Americans wanted nothing to do with a bailout. But President Obama and the Auto Task Force made the difficult decision to push and through bankruptcy while providing $50 billion in loans to keep the doors open at the two companies. The administration estimates that the move staved off an estimated 1.1 million lost jobs, but the political and fiscal cost was high.
Last year the Congressional Budget Office and the Treasury Department estimated that the U.S. government would likely lose $30 billion in the long term. The Detroit News reports that one year later there is a lot more optimism at the White House about the industry and our money. A five-page report released by the Obama Administration points to and the fact that GM shows that the auto bailout was a success. The report adds that “the contrast between where these companies, and the American auto industry, are today and the situation President Obama faced when he took office is stark.” And that projected $30 billion loss? The latest projections by the Treasury Department and the DOT are for a much smaller loss of $8 billion.
The next step towards the U.S. government getting our money back comes when GM executes its initial public offering, which is rumored to be happening as soon as this June. Uncle Sam currently owns 60.8 percent of The General.
[Source: Image: Jeff Swensen/Getty Images]
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