Cheney: We shouldn’t have bailed out GM

The Bush administration should have let General Motors go bankrupt instead of bailing out the troubled auto giant, former Vice President Dick Cheney said today.

Cheney said he disagreed with President Bush’s decision to provide a short term loan to General Motors, which the former Vice President said was intended to keep GM solvent until then-President-elect Obama could take the reins.

“Well, some of us at the time wanted GM to go bankrupt, go to Chapter 11,” Cheney said in an interview with CNBC’s Larry Kudlow.

“The decision was made that, in the final analysis, since our administration was almost over and a brand-new team was about to take over, that the president wanted, in effect, not to take a step that wasn’t necessarily going to be followed by his successor,” Cheney said.

A month before he left office, Bush announced a $13.4 billion bridge loan for General Motors and Chrysler. Cheney argued the administration wanted to keep the auto industry afloat until Obama became president.

“And we came up with a short-term package, in effect, that got us through the–through the inauguration,” Cheney said.

Reports today indicate that GM is inching a bankruptcy plan that would give the United States and Canadian government about a 70% stake in the company.