The "great fear" among lawmakers is that the government might force management in companies in which it now has a stake, the second-ranking Senate Republican argued Friday.

"That's the great fear," Senate Minority Whip Jon Kyl (R-Ariz.) said in an interview with Bloomberg News. "I was a big advocate of TARP both times around; I felt it was important."

"But we didn't want to see the government gradually be taking over the management of companies," he continued. "And originally we were assured that wouldn't happen. This would be a big step in that direction."

The initial ouster of GM CEO Rick Wagoner stoked the ire of a number of conservative lawmakers, who complained the Obama administration had excessively intervened in the company's business.

Kyl insinuated that Washington has done a poor job of working with automakers and banks, and that increased intervention by the government would likely further harm the economy.