The stock of General Motors Corp. and Chrysler LLC would be held by individual U.S. taxpayers rather than the federal government under legislation proposed Thursday.
Taxpayers would get an equal number of shares within a year of the companies emerging from bankruptcy, under the plan unveiled by Republican Senators Jon Kyl of Arizona, Lamar Alexander of Tennessee, and Robert Bennett of Utah.
"This is the fastest way to get the stock out of the hands of Washington," Mr. Alexander said. All 120 million federal income taxpayers would get the stock, he said.
GM will be 60 percent owned by the U.S. government under its plan to emerge from bankruptcy as a private company in fewer than 90 days.
Chrysler, which is trying to sell its best assets to Fiat SpA and emerge from bankruptcy this month, will be 8 percent owned by the United States under its reorganization plan. U.S. Treasury spokesman Jenni Engebretsen declined to comment on the proposal.
The federal government "has no desire to own equity stakes in companies any longer than necessary, and will seek to dispose of its ownership interests as soon as practicable," according to a White House fact sheet distributed on the eve of GM's bankruptcy on Monday.