Issues

Taxpayers to Lose Money as Treasury Sells Off Last of GM Stock

GM CEO Daniel Akerson / AP

Taxpayers are expected to lose $10 billion on the GM bailout, as the Treasury Department begins to sell off its remaining 101.3 million shares.

GM’s stock would have needed to double to more than $70 per share, in order for taxpayers to recuperate the $49.5 billion bailout that was sold to the taxpayers as a winning investment. The stock, however, has never risen above $38 since the company emerged from bankruptcy in November 2010.

The Obama administration is calling the massive taxpayer losses a victory, according to a report from Detroit News.

Gene Sperling, the White House National Economic Council adviser, said the bailout "has turned out far better than anyone could have dreamed of — not only in terms of job creation and the economy and manufacturing, but in terms of those companies and their suppliers being poised to increase and take market share."

President Obama, however, told the daytime talk show "The View" in 2010 that all of the bailout money would be recovered. The administration changed its tune in 2011 when GM’s stock price plummeted after its record-breaking IPO.

Obama car czar Steve Rattner told CNBC in an interview that "we never said the taxpayer was going to get paid back."

The Treasury Department, which oversaw the bailout, began selling off the government’s 7 percent ownership stake in the company on Thursday.

Taxpayers are expected to lose between $15 and $20 billion of the $85 billion the government invested in GM, Chrysler, and GM lender Ally Bank.