WASHINGTON, Sept 11 (Reuters) - The former head of President Barack Obama's auto task force acknowledged on Wednesday that he instructed General Motors not to commit money to a pension fund for some former employees during the automaker's 2009 bankruptcy.
"We concluded it was not commercially reasonable," Steven Rattner, who directed the bailout of the auto sector during the height of the nation's financial crisis, told a U.S. House of Representatives hearing.
Republican lawmakers have criticized the decision as an example of overly deep meddling by the Obama administration in private business.
"The administration picked winners and losers," Congressman Michael Turner, a Republican from Ohio, said during the hearing.
The government plans to exit GM by early 2014. Taxpayers are likely to lose billions of dollars on the bailout.
Rattner and other members of the task force defended their decisions, telling lawmakers their job was to make sure GM emerged from bankruptcy as a viable company. Had the automaker disappeared, many other companies in the auto industry would also have gone under, they said. That would have worsened what was already a deep recession.
"It is not easy to make these kinds of decisions under any circumstances; it was particularly challenging in the crisis atmosphere GM was facing at the time," Rattner told lawmakers.
Under the bailout, which involved the company going bankrupt and the U.S. government paying some $50 billion to take ownership of it, the automaker agreed to fully fund pension obligations of former employees who were members of the United Auto Workers union and had worked at GM's Delphi unit before it was spun off in 1999.
The auto task force told GM not to do the same for salaried employees at Delphi who had also worked at GM before the spinoff, Rattner said.
"There were any number of places and times where General Motors would recommend or suggest doing something that we did not feel was commercially reasonable and this was one of them," he said.
Washington has been winding down its stake in the automaker, which has returned to profit and rejoined the S&P 500 stock index in June.