One News Now (Link) - Jim Brown (May 11, 2009)
Both were initially billed as temporary government loans, but the multi-billion-dollar bailouts of Chrysler and General Motors are not likely to be paid back to American taxpayers.
General Motors, which could soon be majority-owned by the federal government, lost $6 billion in the first quarter and reports that it spent $10.2 billion more cash than it took in from January to March. The Obama administration has given GM until June 1 to make a deal with its creditors or enter bankruptcy.
The negative news from GM comes in the wake of the Obama administration's admission last week that Chrysler will not repay taxpayers the more than $7 billion bailout it received earlier this year. A bankruptcy court has approved an additional $4.5 billion in taxpayer funding for the failed automaker.
James Gattuso, senior regulatory policy analyst at The Heritage Foundation, says the fact that taxpayers will not be refunded for their bailouts of GM and Chrysler is the "biggest non-surprise of the year."
"The administration is trying to win points with the public, I think, by looking like they're taking a firm hand by negotiating hard, by forcing conditions on the firms, which they have to some extent. But it's all been fueled by mammoth taxpayer infusions of cash," he points out. "It's the elephant in the bankruptcy court. So it's time that the taxpayers stood up and said, 'Well, what about our interests?'"
The unions and management deserve blame for the failure of the firms, Gattuso says. He adds that the bondholders took big risks by lending to Chrysler and GM, while the only innocent bystander -- American taxpayers -- did not voluntarily put their money at risk.
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