U.S. automakers eat up much money, the figure may reach $130 billion

It has been revealed that General Motors and Chrysler LLC asked the government for additional loans of $21.6 billion. Eventually, with dealers and suppliers asking for federal aid and consumers getting incentives to buy cars auto bailout tab could reach $130 billion.

The two companies have already received a total loan of $17.4 billion. Another $7.5 billion of loans have already been approved for the financing arms of GM and Chrysler. $25 billion in loans was approved by congress for helping automakers convert their plants to produce more fuel efficient cars. Loan guarantees requested by auto parts suppliers could reach $18.5 billion; by auto dealers $5 to $20 billion, by Ford alone $9 billion. Projected cost of tax credit for "Cash for Clunkers" program is $16 billion. Another $9 billion could be spent for allowing car buyers to deduct interest on auto loans.

So far most of the funding was provided by the Troubled Asset Relief Program, the $700 bailout of the nation's financial system approved last fall. However, additional funding will probably have to be approved by Congress, rather than Treasury.

The House had already passed a $34 billion bailout for GM, Chrysler and Ford last December but Republicans in the Senate did not approve the program. It should be noted that the Democratic majority of both houses has grown largely since then. 

According to the viability plans submitted to the Treasury GM could cost up to $100 billion in loans over two years, and Chrysler between $20 billion and $25 billion in case they went bankrupt. Besides, the case could cause the lost federal tax revenue to reach hundreds of billions of dollars.