A recent GAO report warns that GM and Chrysler may need even more taxpayer money. This comes after GM and Chrysler received the overwhelming bulk of an $81 billion auto bailout under TARP.

The report finds GM and Chrysler may have unfunded liabilities for their pension programs. These obligations could have been terminated if these companies had filed for a typical bankruptcy. They were maintained, however, after the government assumed sponsorship during the most recent crisis. Should these companies be unprofitable, these unfunded liabilities will be unmet by GM and Chrysler as soon as 2013.

The report explains why:

Officials at the Department of the Treasury, which oversees TARP, expect both GM and Chrysler to return to profitability. If this is the case, then the companies will likely be able to make the required payments and prevent their pension plans from being terminated. However, if GM and Chrysler were not able to return to profitability and their pension plans were terminated, PBGC would be hit hard both financially and administratively.”

Should these companies continue to face losses, GAO estimates that for years 2013 and 2014 pension liabilities could cost GM over $12 billion, and Chrysler over $2 billion, to combine for “about $14.5 billion” picked up by PBGC. And that’s only by year 2014. It’s likely taxpayer money will be needed for future years.

Further, the GAO explains:

…until Treasury either sells or liquidates the equity it acquired in each of the companies in exchange for the TARP assistance, its role as shareholder creates potential tensions with its role as pension regulator and overseer of PBGC in its role as pension insurer. In particular, tensions could arise if decisions must be made between allocating funds to company assets (thereby protecting shareholders, including taxpayers) or to pension fund assets (thereby protecting plan participants).

In other words, another bailout is all but inevitable, the only question is whether taxpayers will take the hit through TARP or through the PBGC.  Considering the Obama administration’s big labor ties, expect the PBGC to take the hit.