Treasury Hikes Estimate of Auto Bailout Losses to $14.3B
WASHINGTON — The Treasury Department has raised the government's estimate of taxpayer losses due to the auto bailout by more than $400 million to $14.33 billion.
Earlier this summer, the Treasury had pared its loss estimate to $13.91 billion on its $85 billion bailout of General Motors Co., Chrysler Group LLC and auto finance companies according to The Detroit News.
Overall, the Treasury Department hiked its estimates that it will lose $36.7 billion on its $700 billion Troubled Asset Relief Program, including the value of some AIG shares.
That's up from an earlier estimate of $29.6 billion.
A Treasury spokesman didn't immediately comment on the reason for the change in the estimate.
The new estimate, posted late last week on a government's website, is as of June 30 and doesn't include a recent falloff in the price of GM stock.
In July, the value of the government's stake fell by $1.34 billion. At current prices, the government would lose more than $13 billion on its GM rescue.
The government has recovered about $23.1 billion of its $49.5 billion bailout of GM and still holds a 26 percent stake — or 500 million shares — after it shed about half of its majority stake.
The government lost $1.3 billion on its $12.5 billion bailout of Chrysler Group LLC and completely exited its bailout of the Auburn Hills automaker in July. Fiat SpA now holds a majority stake in Chrysler.
The government's efforts to shrink more of its GM stock and part of its majority stake in Detroit-based lender Ally Financial Inc. have been hampered by the weak overall stock markets.
The U.S. Treasury Department plans to raise $5 billion as part of a $6 billion offering when Ally becomes publicly traded. The Treasury Department owns a controlling 74 percent stake in Ally as part of the $17.2 billion bailout during the financial crisis.
About $126 billion of the $470 billion used in the Troubled Asset Relief Program is outstanding. The losses include $46 billion used by Treasury for housing programs.
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