U.S. hikes estimated cost of auto bailout to $25.1 billion
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Since the bailout of the auto industry, Detroit's big automakers have moved from crisis to profit. |
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WASHINGTON (Reuters) -- The U.S. Treasury Department says the auto industry bailout will cost taxpayers $3.4 billion more than previously thought.
Treasury now estimates the 2009 bailout will eventually cost the government $25.1 billion, according to a new quarterly report sent to Congress.
That is up from the last quarterly estimate of $21.7 billion.
Since the bailout of the auto industry, Detroit's automakers have moved from crisis to profit. GM and Chrysler were put through government-funded bankruptcies that slashed costs and debt.
Altogether, the Bush and Obama administrations spent about $85 billion to rescue automakers, related financing arms and suppliers.
The latest report may still underestimate the government's losses.
The report covers predicted losses through May 31, when GM shares stood at $22.20.
GM shares closed Monday down 7 cents at $20.47. At that price, Treasury would lose another $850 million on the rescue of GM, The Detroit News reported today.
The U.S. government still controls 500 million shares of GM stock and would need to sell them for about $53 each to recoup its $49.5 billion rescue of the company, the News said.
The Treasury has given no timeframe for selling the GM shares.
Republicans have long complained that the bailout was at least partly aimed at salvaging union jobs in Michigan and Ohio, which were hit hard by the 2007-09 recession.
President Obama has campaigned heavily in those states on a signature economic policy achievement -- the revival of U.S. auto manufacturing due to his intervention following its near-collapse soon after he took office.
David Phillips contributed to this report
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