As a result of a mathematical calculation by the Congressional Budget Office, it might be more difficult for the Big Three to get the $25 billion in funding they were seeking from the Fed.
Director Peter Orszag posted his new estimate on the Budget Office’s Web site on Friday, Sept. 12. Congress relies on the Congressional Budget Office to help it make taxing and spending decisions.
The previous budget estimate was $3.75 billion as to the cost of the loans to taxpayers. Due to the further worsening of the credit markets, as well as several other downgrades by the rating agencies of the automakers credit, borrowing costs are expected to be higher.
This places the $25 billion in proposed loans in question, as the cost of the loans to taxpayers is estimated to be $7.5 billion, which is twice the originally stated amount.
