A lawyer for the U.S. Treasury department said Wednesday that the U.S. will lose $30 billion of the $82 billion bailout investment it made in the auto industry.
“The real news is the projected loss came down to $30 billion from $44 billion,” said Gene Sperling, senior counsel to Treasury Secretary Timothy Geithner in an interview with Detroit News.
The Obama administration invested funds in General Motors and Chrysler earlier this year to prevent their liquidation in bankruptcy proceedings.
He called the administration’s decision to save the industry “courageous” since “he knew it was not going to be politically popular.”
The funds for the automakers were draw from bailout money for the financial industry authorized by Congress last October in the midst of the financial crisis.
Last year, lawmakers refused to pass a law specifically authorizing funds for a bailout of the auto industry.
Instead, former President George W. Bush authorized loans to keep GM and Chrysler alive with money from the already authorized Troubled Assets Relief Program, otherwise known as the bank bailout program.
President Obama authorized additional funds this year to keep the companies alive and steer them through an expedited bankruptcy process.