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The government's decision to rescue the U.S. auto industry with an $85 billion bailout in 2009 has been heralded by many industry insiders and none more so than President Barack Obama.

General Motors (GM) and Chrysler are churning out new cars and reporting profits — a turnaround few expected so soon after emerging from bankruptcy in mid-2009.

[Related: GM, Ford Sales Stall in July But Overall Sales Still on Pace for 14M in 2012]

GM executives are urging the Treasury Department, which still owns a 26.5% stake in GM after holding as much as 60.8% of the company, to sell its entire investment, according to The Wall Street Journal. Treasury department officials are "resisting the push" by GM who has "grown increasingly frustrated" with the government's ownership and control of the nation's largest automaker by sales, the Journal reports.

The government has instituted executive pay caps at the Detroit-based automaker and GM management has to fly commercial on business trips instead of taking a corporate jet.

In April the Treasury Department froze the 2012 pay for Dan Akerson, the CEO of GM, and cut total compensation by 12% for GM's top 25 executives. Akerson took home nearly $9 million in salary and stock-based incentives last year compared to the $29.5 million pay package Ford CEO Alan Mulally received.

[Related: Bailouts of GM, Chrysler Were Good for Ford Too: Alan Mulally]

"It's a hindrance. It's an annoyance. It's probably a small weight on the stock," says Justin Hyde, senior editor of the Motoramic blog at Yahoo! Autos. "But from Treasury's point of view, it's not enough to hurt GM's business day-to-day. GM is still a profitable company. It has $33 billion in cash. There's not a sign that Treasury's ownership is somehow dragging it down in the market."

GM stock has fallen more nearly 28% since the company went public again in November 2010. The Treasury Department owns 500 million shares of GM and would need the stock to trade at $53 a share to break even on its $49.5 billion loan. The Treasury Department said last month that it could lose as much as $25 billion from the $85 billion auto bailout, a 15% increase from its previous estimate of $21.7 billion.

"There is no expectation Treasury is going to let go of its stake in GM anytime before the election," Hyde says. "There is simply no upside for Treasury to sell now either politically or to reduce its losses."

It may be difficult for the government to recoup its initial investment on GM, Hyde concedes. But providing the necessary funds for GM to get back on track was the appropriate move, Hyde adds.

"Letting GM go would have been a kind of unilateral disarmament for our industrial base. I think a lot of people realize that now," he says. "GM is probably after the bankruptcy one of the most efficient automakers in the world. They have no debt. They have more cash than they need to operate."

GM shares have been dragged down by the company's pension obligations for hourly workers and GM's struggling European business, Hyde notes. He argues that investors and car buyers need to change their perspective on GM and the government's involvement in the company.

[Related: Ford's Success Rests Upon a Strong Middle Class, Says CEO Alan Mulally]

"There is a certain slice of the population that will simply not consider a GM vehicle until it no longer has ownership by the government," he says. "It's a unique burden that GM alone faces — pretty much around the world. No one cares that 20% of Volkswagen is owned by a German state."

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