Treasury’s exit from GM bailout accelerates

{mosads}According to the Treasury, the government has already recouped about 94.6 percent of the $419.4 billion it spent on TARP. The Treasury actually turned a profit on the bank bailout portion of the program, but it is not expected to recoup its investment in the auto sector.

The Treasury announced in December it had established a plan for exiting its $50 billion bailout of GM, as it held, at the time, roughly 500 million shares of the company. GM agreed to buy back 200 million of those shares by the end of 2012, while the remaining investment would be sold off through various means.

In October, the Congressional Budget Office (CBO) estimated that the GM bailout would cost the government $20 billion, while the Office of Management and Budget (OMB) has pegged the cost at $25 billion.

Under the Treasury’s plan, the government would sell about half its holdings in GM to the company at $27.50 a share, but the government’s official bailout watchdog had estimated the government would need to sell its GM shares at a price of $53.98 to break even on the rescue.

The government also suffered a loss in its rescue of another domestic car company, Chrysler. In 2011, the government exited its rescue of the company six years ahead of scheduled, carrying a price tag of less than $2 billion.