Taxpayers may not recover all of the bailout money awarded to the auto sector, said Elizabeth Warren, chair of the Congressional Oversight Panel in charge of the Troubled Assets Relief Program [TARP].
“When Treasury wants to get tough, it knows how to do so,” she said. “And it did it in the case of the auto industry. Whether that ultimately will be enough to get all of the money for the American taxpayers, I don’t know.”
The Treasury Department spent $49.9 billion in TARP funds for General Motors, which emerged from bankruptcy in mid-July, and $14.3 billion for privately held Chrysler, parts of which remain in bankruptcy proceedings.
While taxpayers’ total net investment is about $81 billion today, the government’s equity stake in Chrysler would need to reach $5.7 billion to recover all funds, assuming other loans are paid, said the Congressional Oversight Panel.