Report Confirms Billions Lost in the Auto Industry Bail-Out
A new report confirms what many had already known: the federal government--or more accurately, the taxpayer--lost billions of dollars in the auto industry bail-out.
The Detroit News is reporting today that a final accounting report indicates the shortfall in the payback amount is $9.26 billion dollars. In total, General Motors, Chrysler and auto lending arms Ally Financial were loaned close to $80 billion with a promise to pay it all back. $70.43 billion was repaid with a combination of stock sales, dividends and interest payments, and a partial loan payback.
Former President George W. Bush began the bailout with $25 billion to help the automakers avoid going belly-up. President Obama added an additional $55 billion.
The President also indicated the automakers paid the money back and then some so that taxpayers weren't left on the hook for the cost. But the report seems to indicate that wasn't exactly true.
Under government accounting rules, the article said, the U. S. Treasury Department on paper actually lost $16.56 billion. As tallied under those rules, taxpayers lost more because interest and dividends paid back aren't applied toward the principal owed. The article sited the comparison of a homeowner not getting credited for interest on a loan but the bank making a profit.
Despite taking the loss, Treasury Department officials say strides have been made by the Troubled Asset Relief Program--or TARP.
"At the peak, more than 700 institutions were in the TARP bank program. Today just 35 remain," said Treasury Secretary Jack Lew.
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