Study: Billions In Industry Bailout Funds Won't Be Repaid

In a result that surprises no one but ought to shock us all, a congressional panel has released findings that tens of billions of dollars of the U.S. government's bailout of the auto industry won't be repaid.

The report, undertaken by the Congressional Oversight Panel, says that about $5.4 billion of the money borrowed by Chrysler won't be repaid, and it is "highly unlikely" that the government's 61% stake in General Motors will fully repay the $50 billion in funds the company received.

Not all of the money has disappeared, however. Chrysler is good for just over $5 billion of the funds lent, and as long as GM's stock improves in value, some of the money will be repaid. Out of the grand total of $74 billion loaned to the industry, about $23 billion of the funds will be subject to what the report calls "much lower recoveries," though exactly what that means isn't conclusive.

The bottom line: don't expect to see much of the funds given to the auto industry coming back into government coffers. Not that you did in the first place.

By way of comparison, however, the banking industry has only repaid about $68 billion of the $700 billion in government TARP funds issued.

U.S. Capitol at duskEnlarge Photo In a result that surprises no one but ought to shock us all, a congressional panel has released findings that tens of billions of dollars of the U.S. government's bailout of the auto industry won't be repaid. The report, undertaken by the Congressional Oversight Panel, says that about $5.4 billion of the money borrowed by Chrysler won't be repaid, and it is "highly unlikely" that the government's 61% stake in General Motors will fully repay the $50 billion in funds the company received. Not all of the money has disappeared, however. Chrysler is good for just over $5 billion of the funds lent, and as long as GM's stock improves in value, some of the money will be repaid. Out of the grand total of $74 billion loaned to the industry, about $23 billion of the funds will be subject to what the report calls "much lower recoveries," though exactly what that means isn't conclusive. The bottom line: don't expect to see much of the funds given to the auto industry coming back into government coffers. Not that you did in the first place. By way of comparison, however, the banking industry has only repaid about $68 billion of the $700 billion in government TARP funds issued. [Congressional Oversight Panel]

By Fritz #1, Posted: 9/9/2009

Didn't see that one coming. So the same congress that doled the money now figured out that its not coming back. That sounds perfectly responsible.
by Marty Padgett #2, Posted: 9/9/2009

Can someone check to see if Glenn Beck's head is still attached? Or has it gone into low geosynchronous orbit about now?
By WhatAShock #3, Posted: 9/9/2009

Big surprise!
As if anyone really expected a free handout to a failure like GM to be repaid. I'd be surprised if GM doesn't fall back into bankruptcy before the end of year.
By Cooper #4, Posted: 9/9/2009

I'm bankrupt and need a bail out. Please, gov't?
by Bengt Halvorson #5, Posted: 9/9/2009

Not a surprise at all. I will agree that the bailout served its purpose in damage control, keeping dealerships, suppliers, etc. going and probably averting the more dire consequences if they would have been allowed to fail completely, but it does not set a good example.
By JavaJunkie #6, Posted: 9/9/2009

This is why government does not belong in business. Can't wait to see the health care mess they create.
By AutoBoy #7, Posted: 9/9/2009

definitely was a tough call. in the end, i think i support the government stepping in - in light of the entire chain of industries reliant on the auto industry. but not a black and white issue in the least. obviously a terrible call to have to make. but the alternative, a pretty chaotic / colossal failure, on balance seemed worse.
by Siddharth Raja #8, Posted: 9/9/2009

Healthcare should be a basic right, not a business.
By carguy #9, Posted: 9/9/2009

truly shocking!!! who would have guessed that our government would be such a colossal failure when it comes to investing our hard earned money!!
very excited about Barak and Nancy being responsible for our healthcare.
by Sunitha Lukka #10, Posted: 9/9/2009

I agree with Bengt.