Treasury Set to Exit GM By Year's End

The New York Times is reporting that the Treasury Department will sell its remaining shares in General Motors, bringing to an end its five-year involvement in the company. Treasury's holdings of GM stock have been quietly dwindling throughout the year, falling from about one-third of the company's stock in late 2012 to 2 percent after a sale two days ago. The proceeds from the sale will likely be around $1 billion assuming GM's stock price doesn't change drastically.

According to the NYT, Treasury will take a $10 billion loss on its investment in GM, which included a series of loans made in 2008 and 2009 and an infusion of common stock purchases that at its peak had Treasury owning three-fifths of GM's stock. In May, CBO estimated that total auto industry assistance, including Chrysler and GMAC (now Ally Financial), would cost $17 billion. GM's stock has risen somewhat since May, though, so that total may be lower. 

Estimated TARP Subsidy Costs (Billions)
Area March 2012 October 2012 May 2013 Maximum Amount Disbursed
Capital Purchase Program -$17 -$18 -$17 $205
Citigroup and Bank of America -$8 -$8 -$8 $40
Community Development Capital Initiative $0 $0 $0 $1
Assistance to AIG $22 $14 $15 $68
Subtotal, Financial Institutions -$3 -$11 -$10 $313
Auto Company Assistance $19 $20 $17 $80
Investment Partnerships $0 -$1 -$2 $19
Mortgage Programs $16 $16 $16 $7
Total $32 $24 $21 $419

Source: CBO

With Treasury's exit from GM, that leaves housing programs as the main remaining part of TARP, which CBO estimates will end up costing the federal government $16 billion. In total, CBO latest estimates from May peg the entirety of TARP at a cost of $21 billion to U.S. taxpayers. The higher stock price from GM compared to May could push that total lower, although of course other portions of TARP could change as well.

Most of the action left in TARP will be in housing, where the federal government continues to provide assistance.