Grassley criticizes GM loan repayment with bailout funds

A leading Republican renewed his criticisms Wednesday about General Motors use of federal bailout funds to repay a $6.7 billion loan. 

Senate Finance ranking member Chuck Grassley (R-Iowa) complained that GM shouldn't have been permitted take funds from an escrow account created by the Troubled Asset Relief Program and it should clearly disclose that the federal government owns 61 percent of the company. 

Grassley said today that the Treasury Department confirmed that GM used escrowed funds calling it "an elaborate TARP money shuffle.

"The bottom line is that the repayment was made on the dime of taxpayers across America," Grassley said today on the floor. "It's misleading to say that GM repaid its TARP loans 'in full, with interest, ahead of schedule, because more customers are buying' GM cars.' "

In a letter to Grassley, Treasury defended the actions, calling it "good news for the company, our investment and American people."

While GM has used that money in the escrow fun it has left a $2.5 billion loan unpaid to the union health benefit fund, Grassley said. 

GM, which could make a profit within the next couple of quarters after only emerging from bankruptcy last summer, has estimated that an initial public offering could relieve the Treasury Department of its obligation.