White House Knew All Along That GMAC Would Need More Cash

A top White House economic adviser today defended the government's $80 billion bailout of the auto industry and its plans to inject a third round of government capital into GMAC.

Christina Romer, chair of the Obama administration's Council of Economic Advisers, said the investments -- including $62 billion in aid for General Motors Co. and Chrysler Group LLC -- have been critical.

"The auto investments have been important for turning around an industry ... where a lot of jobs were at stake," Romer said during a roundtable meeting with reporters sponsored by the Christian Science Monitor.

She also said the Treasury Department's plan to invest up to $5.6 billion in GMAC had been in the works since May.


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