White House eagerly touts early repayment of GM loans

The Obama administration launched a media blitz on Wednesday to promote the early repayment of billions in loans to General Motors.

GM repaid an outstanding $5.8 billion in loans to the U.S. on Wednesday, loans it had received last year during a government-supervised bankruptcy that significantly restructured the beleaguered automaker. The repayment came five years ahead of schedule.

The White House seized on GM's news this morning, framing it as a validation of President Barack Obama's controversial decision last year to provide billions in assistance to GM, as well as Chrysler.

"The prospect of a faster than anticipated exit from government involvement and a return of most of the taxpayers’ investment in these companies has materially improved," said Lawrence Summers, the director of the National Economic Council and a top Obama economic advisor.

"This turnaround wasn’t an accident of history," Summers added in a White House blog posting. "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."

Chrysler, which was acquired by the Italian automaker fiat after its own bankruptcy, announced Wednesday that it had lost $4 billion over the past year, but said that it had posted a net operating profit for the first quarter of this year. Its chief executive, Fiat's Sergio Marchionne, said Chrysler was on track to break even this year.

White House Press Secretary Robert Gibbs said that while the administration doesn't believe that GM and Chrysler have escaped danger of another collapse, the news today represents a validation of the president's decision to get involved with the automakers.

"I'm making the case that, looking back, almost a year later from the president making a very difficult and unpopular decision to loan money to G.M. and Chrysler, in order to go through a structured bankruptcy, and save 1 million to 3 million jobs," Gibbs said, "I think we could all agree that the depth of our economic downturn would hardly have been helped with those million or so people additionally out of work."

Republicans have long derided the bailouts as a bow toward supporters of the White House from organized labor, and have included it in election-year talking points to decry the administration's handling of the economy.

The GOP will still have government involvment in GM to use as a cudgel going into this year's midterm elections, as well. The government maintains a majority equity stake in the company, and has said they plan to divest from GM slowly and steadily after it makes an initial public offering (IPO), something that's expected to happen in the second half of this year.