The Campaign Spot

The Illusion of Accountability for Chrysler’s Loans

Obama, speaking on his plan for the auto industry on April 30: “It’s a partnership that the federal government will support by making additional loans that are consistent with what I outlined last month. As part of their agreement, every dime of new taxpayer money will be repaid before Fiat can take a majority ownership stake in Chrysler.”

ProPublica, today:

Since then, the bailout has grown three-fold. By our count [1] it currently stands at $12.5 billion, which accounts for all the aid the Treasury has pledged to Chrysler before ($4.5 billion), during ($3.3 billion), and after bankruptcy ($4.7 billion).

We’re likely to repeat this exercise next month when the much larger GM goes through a similar process. So the question is: How much of the bailout money for Chrysler will ever come back to the taxpayer?

The reality is that much of the money loaned to Chrylser before and during its bankruptcy process won’t be recovered, said an administration official, speaking for the Auto Task Force, which is a joint effort of the White House and Treasury. (We tried to get the official to speak for attribution, but the official declined.)

Notice the fine print in Obama’s statement, that “every dime of new taxpayer money” had to be repaid. The earlier taxpayer money is now a gift, apparently.

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