It appears the Obama administration’s Troubled Asset Relief Program actually enabled General Motors to repay its TARP loans by using taxpayers’ own funds.
The Congressional Budget Office estimates that this sleight-of-hand will cost taxpayers about $30 billion.
Neither GM nor the Treasury disclosed that the company used other funds held by the Treasury to pay off its original loan until Neil M. Barofsky, the inspector general overseeing the troubled asset program, revealed this fact when he spoke before the Senate Finance Committee on April 20, The New York Times reports.
“So it’s good news in that they’re reducing their debt,” Mr. Barofsky said of GM. But he went on to note that GM was using other taxpayer money to make the loan repayment, according to the transcript of his testimony.
Senator Charles Grassley immediately fired off a letter demanding details of the transaction from Treasury Secretary Timothy Geithner.
“I am concerned ... that this announcement is not what it seems,” Grassley wrote. “In fact, it appears to be nothing more than an elaborate TARP money shuffle.”
“The public would know nothing about the TARP escrow money being the source of the supposed repayment from simply watching GM’s TV commercials or reading Treasury’s press release,” Grassley says, adding that “many billions” of federal dollars remained invested in GM, much of which will never be repaid.
Geithner told top lawmakers that the much-criticized bailout programs put in place as response to the 2008 economic meltdown will cost no more than $87 billion.
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