Good news: Auto bailout no longer costing taxpayers $14.3 billion

posted at 12:10 pm on November 17, 2011 by Ed Morrissey

Remember how the Obama administration bragged about saving the American auto industry with the $85 billion bailout for GM and Chrysler?  They’ve claimed that the bailout will only — only — cost taxpayers $14.3 billion in the end.  However, like so many of the White House’s economic claims, further revisions bring bad news (via The New Editor):

The Treasury Department dramatically boosted its estimate of losses from its $85 billion auto industry bailout by more than $9 billion in the face of General Motors Co.’s steep stock decline.

In its monthly report to Congress, the Treasury Department now says it expects to lose $23.6 billion, up from its previous estimate of $14.33 billion.

The Treasury now pegs the cost of the bailout of GM, Chrysler Group LLC and the auto finance companies at $79.6 billion. It no longer includes $5 billion it set aside to guarantee payments to auto suppliers in 2009.

The big increase is a reflection of the sharp decline in the value of GM’s share price.

The Detroit News actually reported this on Monday, and the estimate from the Treasury is based on the GM stock price as of September 30th of $20.18.  It’s since rebounded a bit to $22.47 at around 11 am ET today.  That’s still a rather steep decline from its January high of $39.48 a share, but it’s a little better than the $19.48 low GM hit last month.  The next estimate for the bailout cost will come on December 30th.

Tom Elia notes that the losses shown by Treasury don’t include a special arrangement for GM:

It is important to note that these figures do not include the apparently unprecedented tax treatment GM is receiving from the IRS with regard to its ‘tax-loss carry forwards,’ something restructured companies never get to take advantage of.

Including those figures in calculations totaling the entire cost of the auto bailout for the federal government raises the loss on the bailout by about $15-$20 billion, or to around $35-$40 billion.

The Detroit News also reports that this will inflate the cost of the overall bailout, too:

The new estimate also hikes the overall cost of the $700 billion Troubled Asset Relief Program costs to taxpayers. TARP is the emergency program approved by Congress in late 2008 at the height of the financial crisis.

In total, the government used $425 billion to bailout banks, insurance companies and automakers, and provided $45 billion in housing program assistance.

The government now expects to lose $57.33 billion, including the full cost of the housing program, up from $36.7 billion. The new estimate means the government doesn’t believe it will make an overall profit on its bailouts.

Well, only the government ever really expected to make a profit on TARP anyway, so that’s nothing more than a cold dose of reality.  But it’s good to keep these figures in mind as the Obama 2012 campaign tries to defend the auto bailouts and downplay the cost to taxpayers over the next year or so.

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Remember how the Obama administration bragged about saving the American auto industry with the $85 billion bailout for GM and Chrysler?

good times, good times indeed./

ted c on November 17, 2011 at 12:15 PM

In other news – “in the real world thieves go to prison”.

VegasRick on November 17, 2011 at 12:16 PM

It woulda cost us more not to do it, or something.

Akzed on November 17, 2011 at 12:17 PM

Solution:

Raise the price of Chevy Volt to $200,000. Only have to sell 300 of them.

This plan approved by Barack the Genius.

fogw on November 17, 2011 at 12:19 PM

Good news: Auto UAW Union bailout no longer costing taxpayers $14.3 billion

Fixed.

iurockhead on November 17, 2011 at 12:21 PM

“But it’s good to keep these figures in mind as the Obama 2012 campaign tries to defend the auto bailouts and downplay the cost to taxpayers over the next year or so.”

Have you seen Herman Cain’s hat…? – MSNBC

/

Seven Percent Solution on November 17, 2011 at 12:21 PM

The Obama Administration gambles with our money, and continues to roll snake eyes.

portlandon on November 17, 2011 at 12:27 PM

BUT THE UNIONS ARE DOING JUST FINE SO HOW DO YOU PUT A PRICE ON THAT?

SDarchitect on November 17, 2011 at 12:29 PM

Jeeezzussss!

Now it is only $80 billion?

Fraud, Waste and Abuse used to be seen as a bad thing.

As Maxie Waters says “That’s life.”

coldwarrior on November 17, 2011 at 12:37 PM

Why Hybrid Cars Aren’t Selling Well:

The sale of hybrid automobiles constitutes an anemic 1.8% of all vehicle sales, down from a peak of 2.1% in October 2006.

petefrt on November 17, 2011 at 12:37 PM

This is all a big joke on the American taxpayer. Now the US Postal service is in debt $5.1 billion. Does this mean we will have to bailout FedEx and UPS because obviously they will be losing money, right?

rjoco1 on November 17, 2011 at 12:38 PM

MISSING FROM THIS ANALYSIS: The billions wasted, at the insistence of the Obamacrats, on the development and unsuccessful deployment of the VOLT. In a repeat of the EV1 debacle, there will be huge disposal costs: these turkeys may require their own landfill!!

landlines on November 17, 2011 at 12:45 PM

When Obama sees the latest profit to earnings ratios, he’s likely to fire the CEO of GM again.

TexasDan on November 17, 2011 at 12:48 PM

Meanwhile, in Detroit, the mayor tells everyone that the city will have to cut pension payouts, cut wages, layoff city workers, andcut city services or Detroit runs out of money in April.

In searching for this story, first read yesterday, Google’s search results included a catalog of stories identical to this one going back 3-5 years.

Skandia Recluse on November 17, 2011 at 12:55 PM

Where have all the billions gone?
Long time passing
Where have all the billions gone?
Long time ago
Where have all the billions gone?
Barry’s friends have stole them son
When will you ever learn?
When will you ever learn?

RalphyBoy on November 17, 2011 at 12:58 PM

Keep in mind:

“The government has recovered $23.2 billion…”

This calamity is not over yet.

AND…
That the stock of GM is currently worth
$34.26 billion.
So if GM sold out today it could not pay back the money used to keep the Union workers/Democrat voters employed…

albill on November 17, 2011 at 1:05 PM

Revised numbers do not matter! The media trumpeted the first good lies as truth, and that is all demo-dummies will remember. Just you try talking to one of them about the revised numbers and see if they will stop their talking points and shouting you down to acknowledge reality.

AnotherOpinion on November 17, 2011 at 1:17 PM

Every union enterprise is too big to fail in the eyes of demorats.

There could be a sign-shop with three employees which is failing, but if they were union the feds would be more than happy to give them $10 million while screaming “Too big to fail!”

Bishop on November 17, 2011 at 1:19 PM

When Obama sees the latest profit to earnings ratios, he’s likely to fire the CEO of GM again.

TexasDan on November 17, 2011 at 12:48 PM

I see what you did there…

pain train on November 17, 2011 at 1:47 PM

In its monthly report to Congress, the Treasury Department now says it expects to lose $23.6 billion

How can this possibly be? According to General Motors CEO Ed Whitacre:

GM has “repaid our government loan, in full, with interest, five years ahead of the original schedule.”

Please don’t tell me he is just another lying sack of sh**!

pain train on November 17, 2011 at 1:52 PM

Where’s that idiot troll who was on here a couple of months ago crowing about what a “great deal for taxpayers” the auto bailouts were?

Ah . . . the sounds of silence. Speak volumes, don’t they?

AZCoyote on November 17, 2011 at 2:11 PM

Just think if they could write it off as a charitable contribution to the UAW….

Axeman on November 17, 2011 at 6:35 PM