Obama Wants Banks to Pay for Auto Bailout Losses
The White House wants the nation's largest financial institutions to repay taxpayers for the costs of bailing out banks and automakers, reported The Detroit News.
Under the proposal, the largest 50 banks -- including GMAC -- would pay $90 billion over 10 years to cover taxpayer losses under the $700 billion Troubled Asset Relief Program.
Despite receiving bailout money, General Motors Co. and Chrysler Group LLC would not be required to pay new taxes; the banks would repay taxpayers for the anticipated $30.4 billion loss on the $86 billion auto bailout.
The White House defends its decision not to tax automakers -- arguing the banks helped slow auto sales.
Gene Sperling, a senior adviser to Treasury Secretary Timothy Geithner, told reporters on a conference call that Detroit-based auto lender GMAC will be one of the institutions covered by the new fee.
He said the administration is committed to getting automakers to repay their outstanding loans.
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