Republicans seek to give US taxpayers control of GM

WASHINGTON, June 3 - Two senior U.S. Senate Republicans are drafting legislation to require the government to hand over to American taxpayers its controlling stake in General Motors Corp, a party aide said on Wednesday.

To have any chance of passing the legislation, Republicans would need to win the support of Democrats who control both chambers of Congress, as well as President Barack Obama.

There was no immediate indication they could do so, but the bill would broaden debate on the president's unprecedented action to take a 60 percent ownership stake in GM.

Under the planned legislation, the Treasury Department would give stock certificates to the 154 million Americans who pay federal taxes. Taxpayers in effect financed the federal government's $60 billion investment in GM, which filed for bankruptcy protection on Monday.

"If they didn't pay taxes, they wouldn't get a share," the aide said.

Senator Lamar Alexander, chairman of the Senate Republican Conference, and Senator Robert Bennett, a member of Republican leadership, planned to announce the legislation on Thursday as its lead sponsors.

Earlier this week, Alexander made the case for such a plan in a Senate speech.

"Those shares might not be worth much now, but put them away and one day they might contribute something toward a college education," Alexander said. "GM's 610 million shares were only worth 75 cents just before bankruptcy, but they were worth $40 dollars per share two years ago."

The plan would authorize the Treasury Department to distribute to individual taxpayers all of the government's stake in the new GM as soon as is practical, an aide said.

"This bill would be a tough one for Democrats to oppose," the aide said. "They would essentially say that they would rather have the government run and own an auto company than the American people."

The envisioned program would be similar to tax rebates that are handled by the Treasury Department and Internal Revenue Service, the aide added.

The stock certificates could also be applicable to Chrysler, which is nearly ready to exit its bankruptcy case.

Republicans are concerned the GM bankruptcy case could result in the U.S. government, United Auto Workers and Canadian government ending up with lengthy ownership of GM.

RELATED NEWS:

* TAKE A LOOK-Auto industry in turmoil ID:nCARS1

* US auto sales drop, rays of stability seen ID:nL3642130

* Court agrees to hear Chrysler sale appeal ID:nN03309342