The announcement, to be made today, was previewed by Gene Sperling, senior counsel to Treasury Secretary Timothy Geithner, in an interview with DetNews. According to Sperling, the loss to be announced is better than the initial estimate of $44 billion. And that's the real news, he says...
"The real news is the projected loss came down to $30 billion from $44 billion."
President Obama tried to tamper the blow by saying the money used for the GM and Chrysler bailout helped save hundreds of thousands of jobs. Sperling agrees with that statement.
"It was right decision then and the right decision now. It was a courageous decision by the president" to give GM and Chrysler "a rebirth even though he knew it was not going to be politically popular."
According to the source, the loss to be announced today is in line with what the Government Accountability Office, the Troubled Asset Relief Congressional Oversight Panel suggested.
For a bit of history, the US gave $50 billion to GM (exchanged for a majority stake, except for $6.7 billion and $12 billion to Chrysler. GMAC received $13.5 billion from the Treasury Department, which now owns 35.4 percent of the financial company. And this is barely scratching the surface.
"We also took steps to prevent the rapid dissolution of the American auto industry, which faced a crisis partly of its own making, to prevent the loss of hundreds of thousands of jobs during an already fragile time," President Obama was quoted as saying by the source. "These were not decisions that were popular or satisfying; these were decisions that were necessary."
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