New research from the Heritage Foundation contradicts President Obama's assertions that the federal government's auto bailouts were not just a handout for auto workers. Back in February, Obama told members of the UAW:
I've got to admit, it's been funny to watch some of these folks completely try to rewrite history now that you're back on your feet. (Applause.) The same folks who said, if we went forward with our plan to rescue Detroit, "you can kiss the American automotive industry goodbye." Now they're saying, we were right all along. (Laughter.)
Or you've got folks saying, well, the real problem is -- what we really disagreed with was the workers, they all made out like bandits -- that saving the auto industry was just about paying back the unions. Really? (Laughter.) I mean, even by the standards of this town, that’s a load of you know what.
But new research shows that taxpayer losses from the auto bailouts came from subsidizing union pensions:
The U.S. government will lose about $23 billion on the 2008-2009 bailout of General Motors and Chrysler. President Obama emphatically defends his decision to subsidize the automakers, arguing it was necessary to prevent massive job losses. But, even accepting this premise, the government could have executed the bailout with no net cost to taxpayers. It could have—had the Administration required the United Auto Workers (UAW) to accept standard bankruptcy concessions instead of granting the union preferential treatment. The extra UAW subsidies cost $26.5 billion—more than the entire foreign aid budget in 2011. The Administration did not need to lose money to keep GM and Chrysler operating. The Detroit auto bailout was, in fact, a UAW bailout.
This week, Obama and his campaign are touting the auto bailouts and how they saved Michigan's labor force with "saved or created jobs." But truth be told, the bailouts created nothing more than additional debt and saved nothing but union workers' padded pension plans.