Low GM stock prices have increased the cost of the auto industry bailout by $9 billion.
A decrease in General Motors' stock value has led the Treasury Department to tack an additional $9 billion onto estimated losses stemming from the $85 billion auto industry bailout.
The Treasury Department's loss estimate, which was revealed as part of a monthly report to Congress, swelled to $23.6 billion based on the September 30 closing price of $20.18 for GM's stock, which represented a drop of one-third compared with the previous quarterly price.
The estimate will be reassessed based on more recent stock prices on December 30; yesterday, GM's stock closed at $22.99.
Also increasing is the projected loss from the $700 billion Troubled Asset Relief Program (TARP), which the government expects will cost taxpayers $57.33 billion, up from an earlier estimate of $36.7 billion. TARP was the emergency program implemented in 2008 that included, among many other things, loans to automakers and their suppliers.
"Both TARP and the auto industry rescue are still on track to cost a fraction of what was originally expected during the dark days of the financial crisis," said Matt Anderson, a spokesman for the Treasury Department.
So far, the government has recouped $23.2 billion of the $49.5 spent to bailout GM while reducing its holdings from 61 percent to 26.5 percent of the automaker.
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