On Wednesday morning, The Heritage Foundation released a paper
by Center for Data Analysis Senior Fellow James Sherk on the cost of
the 2009 auto bailout. The Treasury Department estimates that the auto
bailout will end up costing taxpayers $23 billion and, according to
Sherk, all of those losses are the result of the Obama administration’s
special treatment of the United Auto Workers (UAW) union. In the paper,
Sherk pegs the eventual cost of that special treatment at $26.5 billion —
$3.5 billion more than the auto bailout’s estimated net cost.
I sat down with Sherk last week for a phone interview to discuss the report. [Full disclosure: I was a contract employee for the Center for Data Analysis in 2010, and I did some work with Sherk during that time.]
Dustin Siggins: The entire taxpayer investment in GM and Chrysler was about $80 billion, and obviously included a variety of aspects to it. Were there other components of the bailout that could have been done better to save the same amount of money?
James Sherk: It’s harder to quantify if [the administration] could have been cost-conscious elsewhere in the bankruptcy process. It’s obvious where they spent too much on the UAW because of the treatment they received in opposition to traditional bankruptcy law. For example, other unsecured creditors were not treated as well at the UAW Voluntary Employee Beneficiary Association, despite having equally strong claims as the UAW legally. They may well have been able to do other aspects better, or perhaps not, but that is not as obvious.
I sat down with Sherk last week for a phone interview to discuss the report. [Full disclosure: I was a contract employee for the Center for Data Analysis in 2010, and I did some work with Sherk during that time.]
Dustin Siggins: The entire taxpayer investment in GM and Chrysler was about $80 billion, and obviously included a variety of aspects to it. Were there other components of the bailout that could have been done better to save the same amount of money?
James Sherk: It’s harder to quantify if [the administration] could have been cost-conscious elsewhere in the bankruptcy process. It’s obvious where they spent too much on the UAW because of the treatment they received in opposition to traditional bankruptcy law. For example, other unsecured creditors were not treated as well at the UAW Voluntary Employee Beneficiary Association, despite having equally strong claims as the UAW legally. They may well have been able to do other aspects better, or perhaps not, but that is not as obvious.
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