Taxpayers Lose in General Motors Bailout

Posted: Oct 28, 2009 9:50 AM
You may recall that when Congress was bailing out the auto industry, I had real concerns about whether the taxpayers would ever get that money back. The auto industry, GM in particular, has had a poor track record with loans in the past, having come back to the federal government again and again with its hand out. Last December, the U.S. Treasury Department loaned General Motors $13 billion. In the spring, Treasury loaned GM another $6 billion. In June, days before GM declared bankruptcy, the Administration loaned another $30 billion – just in time to convert taxpayer loans to equity taking ownership of GM. That’s a total of $49 billion.

The problem is that President Obama’s former “car czar,” Steve Rattner, estimates that the taxpayers’ stake in GM now stands around $25 billion. That means $24 billion of taxpayer dollars may have been lost for good. In fact, despite this multi-billion dollar cash infusion to GM, sales declined by 45% in September, while privately-owned Ford Motors fell only 6%. And, that makes it far less promising for taxpayers.

What’s more, we know little to nothing about how this whole transaction transpired.  The President’s Automotive Task Force has operated in complete secrecy and they must be held accountable for their actions.  Taxpayers deserve both fiscal responsibility and transparency from their government.
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