White House Exults in General Motors Repayment

AP

No one was cheering louder than the White House about General Motors' repayment of $6.7 billion in loans from the federal government.

First thing this morning, Press Secretary Robert Gibbs alerted his 56,000 followers on Twitter of "BIG NEWS."

"GM pays back US $6.7 billion used to save jobs," Gibbs exulted. But he had more.

"BIGGER NEWS," he trumpeted. "Payment was 5 years ahead of schedule."

And Gibbs still had a few of his 140 characters left to link to a New York Times article about it.

Later at his daily press briefing, Gibbs didn't wait for a reporter to ask him about the GM payback. He portrayed it as a vindication of President Obama's decision to provide a federal bailout to GM and Chrysler:

"In the 12 months before the President took office, the auto industry lost nearly 40 percent of its sales volume and over 40 -- I'm sorry, lost over 400,000 jobs. Today employment in the auto industry has stabilized. Since GM exited bankruptcy in early July 2009, the industry has added 45,000 jobs."

The amount repaid by GM is less than 13 percent of the $52 billion in federal bailout funds provided to the automaker. The remainder of the bailout was converted into stock, which GM still intends to pay off.  Gibbs concedes, "obviously, we're not out of the woods by any stretch of the imagination." But he thinks the payback demonstrates that GM is on a path to renewal.

Chrysler is still losing money from the time it exited bankruptcy last year, but Gibbs pointed out that the company "achieved an operating profit in the first quarter of 2010, the first quarterly operating profit since the beginning of the economic crisis."

Vice President Biden added his voice to the White House chorus, hailing the GM payback as a "huge accomplishment."

"The President of the United States took a lot of heat for that effort," said Biden of the GM bailout, saying it kept the company alive while it was transitioning.

"And I would just like to point out that I am proud to be associated with the guy who saw the necessity to do this," boasted the VP about his constitutional boss.

Biden said the rapid GM payback "exceeded our expectations."

White House economic advisor Lawrence Summers came closest to telling the critics of the bailout "we told you so," without actually using those words.

"This turnaround wasn't an accident of history," said Summers in a blog on the White House website. "It was the result of considered and politically difficult decisions made by President Obama to provide GM and Chrysler - and indeed the auto industry - a lifeline, if they could demonstrate the will to reshape their businesses and chart a path toward long-term viability without ongoing government assistance."

But the payback also gives the White House ammunition in defense of future government bailouts, should they be needed. Gibbs said it's the White House hope they won't be.

"The President wants to put into our law a series of regulations that he believes will prevent having to do that," said Gibbs. It's a reference to the financial regulatory reform legislation Mr. Obama wants Congress to enact.

Gibbs says if new "rules of the road" are passed and financial institutions behave differently, taxpayers won't be put at risk for bailouts.

"I think that's the strong goal of financial reform, and that's what the President would like to see the Senate pass," said Gibbs.

Mr. Obama makes that case tomorrow a few blocks from Wall Street, when he delivers another speech on the reform bill he wants.

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Mark Knoller is a CBS News White House correspondent. You can read more of his posts in Hotsheet here. You can also follow him on Twitter here: http://twitter.com/markknoller.

[kevkvndn1111]

This story is not presenting all the facts. Yes the 6.7 Billion was paid back but you failed to mention that this was done not through GM's revenues but rather from OTHER TARP funds. This is not an accomplishment GM - and CBS why would you omit that information?

The TARP inspector general, Neil Barofsky, bluntly told the Senate Finance Committee during a hearing last week that the repayment "is just other TARP money" and lawmakers should not "exaggerate" the feat.

"It sounds like they're kind of like taking money out of one pocket and putting it in the other to do that," Sen. Tom Carper, D-Del., said at the hearing.

[Zann-Zel]

Reading the comments has led me to this conclusion.

If the White House or Obama made a statement that the sky was Blue.......there would instantly be people screaming that its a conspiracy, the sky is really red and he's lying to you!

[truth-b-toll]

WHAT?
this is SOCIALISM!
what?
not socialism?
ugh, WHERE'S HIS BIRTH CERTIFICATE?

[cbs4111]

CBS, Shame on you. Do your fact checking. The Obama White House is intentionally misleading the public. GM hasn't made ONE single dime of profit since the US Government's takeover. NOT ONE. In fact they've lost billions. They couldn't have paid off the loan, they haven't made any money. So what actually happened? The US Government placed $16.4 billion of the American taxpayer's money in an escrow fund for GM to use during their recovery from bankruptcy. The US Treasury Department and Obama's Auto Task Force gave GM authorization to use this taxpayer money to pay off the loan.

THE US GOVERNMENT PAID OFF THE LOAN FOR GM, GM didn't pay off the loan.

Don't believe it? You can look it up yourself.

http://www.freep.com/article/20100420/BUSINESS01/4200328/GM-keeps-loan-promise

http://www.reuters.com/article/idUSTRE63633X20100407

This article shows the level of dishonesty in press releases coming out of the White House.

[KeithDrippingSprings]

Thanks for the ex plainer. I couldn't figure out how, in the middle of a depression, the car maker could recover and then pay off their debts.

[pasmalltown]

cbs4111 -
Your Reuters link is undated with comments on the blog all from April 7, 2010 (and "This discussion is now closed.") This is old news, care to freshen it up a bit? The "facts" from this article are about losses in 2009 which no one can dispute, however the fact that GM "seems" to be coming back from those 2009 losses is not a bad sign, is it?

And from your freep.com article:
"The automaker's payments are to include $4.7 billion to the U.S. Treasury and $1.1 billion to the Canadian government; it had already paid $2.3 billion on both loans. The money comes from a $16.4-billion escrow fund set up by the two governments as part of GM's bankruptcy that the automaker is required to pay back by June."
So your statement: "The US Government placed $16.4 billion of the American taxpayer's money in an escrow fund for GM to use during their recovery from bankruptcy" is somewhat misleading in itself....

Not only that but Justin Hyde, the author of the article your cite, has had "a hard on" for GM dating back to 2005, so I would hardly categorize his writings as "independent" as far as GM goes..........

[wfw3536]

Great news we get 6 billion, but will end up taking a hit for 50 billion of near worthless stock. This is our Federal government at work. No wonder we will be 20 trillion in debt in the next 7 years.

[pasmalltown]

"GM pays back US $6.7 billion.." not 6 million. The rest converted into stock 52-6.7 = 45.3 million, not 50 million. And the 20 trillion is a projected debt i.e. not reality yet. Hope you don't operate a cash register at work.......... And who was your second grade math teacher?

[direwolf369]

Wow crowing about less than a tenth of their bribe money being paid back. Did the administration use it to buy back the bonds from the Chinese and reduce our debt or did they put it in a slush fund for more bribes later on? That is the question that needs to be asked!

This is the second time GM has been bailed out so the financial reforms being touted will be gutted by the politicians like they gutted the first auto bail out and amensty for illegal aliens.

Why has the previous financial reforms not been enforced. Is it because the media is so biased that it fails it job for a few Judas coins for shame.

[dwilson59]

It is so sad that the people that had invested in GM lost all the money to the unions.

[retm-w]

dwilson59

How did they lose their money to the unions? The unions have nothing to do with the management of the company what the company builds, or how they build it.

[jwesel1]

The only people money was lost to are the executives of GM, not the unions.