(CNSNews.com) – Only 65 percent of the nearly $80 billion that President Obama unilaterally diverted from the Troubled Asset Relief Program (TARP) to bail out the auto industry over the strong objections of Congress has been recovered, according to the U.S. Treasury Department’s July 2013 (TARP) report to Congress, which was released on Aug. 12th.
When Congress passed legislation creating TARP in October 2008 to stabilize the nation's financial institutions and prevent an economic meltdown, lawmakers intentionally excluded the auto industry from the TARP program.
Even former House Majority Leader Rep. Steny Hoyer (D-Md.) admitted to CNSNews.com in March 2009 that he had no idea where Obama got the legal authority to use TARP funds to oversee a restructuring of Chrysler and General Motors, since Congress also voted down a separate plan to bail out the auto industry.
Since 2008, the federal government has recovered more than 95 percent of the $420.6 billion in TARP loans. However, of the $79.7 billion in TARP funds Obama took to bail out Chrysler and General Motors, $21.6 billion is still outstanding. Approximately $19.1 billion of that amount is attributed to GM.
GM received more than $50 billion in TARP money after December 2008, when it began its Chapter 11 restructuring. About 80 percent of the TARP funds, or $40.7 billion, “was effectively converted into an initial 60.8% equity stake,” according to the Congressional Research Service (CRS).
As private investment in GM increased and the government sold off stock, the government’s equity stake gradually decreased to 17.7 percent, CRS noted. But the stock market is not cooperating with the pledge the Treasury Department made last December to fully divest itself of 500.1 million shares of GM stock within the next 12 to 15 months.
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