- Texas man arrested for powder-letter hoax
- Islamic State opens ‘marriage bureau’ for single jihadists
- Drone almost blocks California firefighting planes
- Tornado rips off roofs, downs trees near Boston
- GOP: Environmental rules keeping agents from accessing border
- John Kerry: Millions displaced by religious fighting in 2013
- Federal appeals court rules against Virginia’s gay marriage ban
- White House says Russia ‘losing’ war in Ukraine
- Hamas turns to North Korea for weapons deal, Iran for money
- Syrian casualties surge as jihadis consolidate
EDITORIAL: Government Motors repayment fraud
Question of the Day
General Motors lost $3.4 billion in the fourth quarter of 2009 and is still struggling to reorganize so the company can try to eke out a profit. This grim reality didn't stop GM from making hay last week for supposedly paying back a $6.7 billion government loan five years ahead of schedule. What was left unsaid was that the automaker used another kitty of taxpayer cash to pay off the earlier government loan. This is an accounting shell game, not progress.
Previously unreleased documents supplied to The Washington Times reveal that GM specifically used funds it received from the Troubled Asset Relief Program to pay off the government loan. According to Neil Barofsky, the special inspector general for TARP, $4.7 billion of $6.7 billion - 70 percent - of what GM paid back came from TARP money the company received. "The one thing a lot of people overlook with this is where they got the money to pay the loan," Mr. Barofsky told Fox News' Neil Cavuto on Wednesday. "It isn't from earnings." The numbers are based on a quarterly report Mr. Barofsky's office provided to Congress last week.
Jared Bernstein, chief economist and economic policy adviser to Vice President Joseph R. Biden Jr., disputes the special inspector general's findings. "That is not correct, I don't think that is correct," Mr. Bernstein told The Washington Times. "[General Motors] repaid with funds from their own cash accounts, from their own earnings." The cash used by GM to pay back the loan "is the property of General Motors, there is no question about that," he insisted. Some of the money used to pay off the loans may have originated from TARP funds, but "it is really hard to know," he equivocated, because the funds are mixed together and "it is like trying to put an omelet back together again."
The Treasury Department's press office also disagreed with Mr. Barofsky's characterization that GM paid off one credit line with another credit line. The watchdog, however, won't budge. When asked how to tell whether the $4.7 billion used to pay off the government loan came from TARP funds and not some other source, a spokesman for the Special Inspector General's Office explained: "We have a letter from General Motors requesting that they take the money out of escrow and pay the other debt down. And the money in the escrow was clearly TARP funding." That letter has been released by the Special Inspector General's Office.
Despite misleadingly rosy propaganda fed to the press, the sad saga of General Motors' transformation into Government Motors continues. As a ward of the state, GM has to do the bidding of its Washington masters and stay in lock step with the Democrats' claims about the company's condition. The truth is that GM's condition remains poor.
The only reason the company has been able to pay off its government loan is because the Obama administration has given GM more money than it has been able to spend. Hence, proceeds from one loan are sitting around to be used to pay down another loan. That's hardly evidence that GM has been a good investment. To the contrary, the shell game makes clear that the Obama administration is wasting billions of taxpayer dollars on a carmaker that is careening toward a cliff.
About the Author
- LETTER TO THE EDITOR: Time for some policy 'pars' from golfer-in-chief
- LETTER TO THE EDITOR: Texas law is making women safer
- LETTER TO THE EDITOR: Redskins partnership is a win-win
- LETTER TO THE EDITOR: No taxpayer funds for illegals
- EDITORIAL: The two faces of Mark Warner
Latest Blog Entries
TWT Video Picks
By David Keene
Allowing states to innovate could reduce dependency on bureaucracy
Get Breaking Alerts
- D.C. seeks to stay judge's order allowing gun owners to carry in public
- Illegal immigrants demand representation in White House meetings
- White House says Russia 'losing' war in Ukraine
- Hillary Clinton: Forget Obama, George W. Bush made her 'proud to be an American'
- HAYDEN: Intelligence, evidence and the case against Russia
- Border surge puts Obama legacy on immigration at stake
- Romney would win popular vote in rematch against Obama: CNN poll
- Iraqi Christians rally at White House: 'Obama, Obama, where are you?'
- Report: 40% of weapons sent to Afghanistan are unaccounted for
- KING: "Man-caused disaster" on the southern border