GM Files for Bankruptcy, Plays Government for a Sucker

By Mary Kate Cary, Thomas Jefferson Street blog

About a week ago, President Obama was asked by Steve Scully of CSPAN when we are going to run out of money:

SCULLY: Yet, it all takes money. You know the numbers, $1.7 trillion debt, a national deficit of $11 trillion. At what point do we run out of money?

OBAMA: Well, we are out of money now.

And yet this morning, when GM announced its bankruptcy filing, it included an additional $30 billion in new bailout money from the government, according to the Washington Post. Despite the fact that we are "out of money," senior administration officials announced the bailout deal last night, which raises the total amount of government funding for GM to $50 billion. However, the Treasury Department "does not believe or anticipate that any additional assistance to GM will be required," the official said.

Give me a break. The idea that Obama will hold the line at $50 billion for GM is just not credible. There are also no guarantees that taxpayers will ever get any of that money back. The Wall Street Journal agrees, in its unsigned editorial today, which points out that then-CEO Rick Wagoner predicted back in December that if GM wasn't saved by the government, the bill to taxpayers could easily hit $100 billion.

Well, GM was saved in December and again in March, and as early as today the feds will rescue it a third time in a prepackaged bankruptcy that is already costing at least $50 billion, and that's for starters. Welcome to Obama Motors, and what is likely to be a long, expensive and unhappy exercise in political car making.

Bob Samuelson, in a longer piece this morning about the free pass Obama is getting from the press corps, points out that this is bigger than the car bailout—it's about Obama's rhetoric and its constant inconsistencies. Obama promised a return to bipartisanship; instead he's enacting a tough partisan agenda. "Both couldn't be true," Samuelson argues. He promised "fiscal responsibility," yet we see budget deficits as far as the eye can see. He says he'll control healthcare spending, yet he's proposing billions in more spending in order to reform healthcare. Why isn't anyone pointing this out?

The administration says it doesn't "believe or anticipate that any additional assistance to GM will be required," but given the president's track record so far, that's just not believable. It reminds me of that great George Strait song: If you buy that, I've got some ocean-front property in Arizona.

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