The uncomfortable marriage between General Motors Co. (NYSE:GM) and the U.S. Treasury is proving harder to dissolve than either side had hoped.

Detroit-based GM has come a long way since the government's $50 billion bailout of the automaker in 2009, culminating with a $20.1 billion initial public offering last November that allowed the Treasury to begin selling down the 61% stake it received in the company in return for its largess.

Selling Treasury's remaining 500 million shares, or about 26.5% of GM's total outstanding stock, has proved to be a bit more of a challenge, but not for lack of desire from both sides. GM trumpeted that it had shed the "government motors" label post-IPO, but the lingering Treasury stake remains an overhang on the stock and a reminder of the automaker's recent past. The White House, meanwhile, has a strong desire to finish out the bruising auto bailout before it gears up for a 2012 reelection campaign.

The challenge is finding an appropriate exit point. The Treasury sold shares at $33 apiece during the IPO, but it needs an average price of about $53 per share on what is left to break even on the bailout. The government, according to sources, had initially hoped to sell down its remaining stake after the post-IPO lockup expired in May, but with shares then trading closer to $30 apiece, it held off in hopes of a blockbuster second quarter that would increase investor confidence and lift the shares higher.

That blowout quarter happened, with GM on Aug. 4 reporting a better-than-expected second-quarter profit of $2.5 billion on strong sales and improved pricing power. However, company CFO Daniel Ammann on a call with analysts warned that GM sees a "fairly bleak economic picture" that could dampen results in coming months.

That sentiment, coupled with a weak stock market and ongoing issues including GM's unfinished business turning around its European arm and looming union negotiations, has kept investors on the sidelines. Shares of GM traded at $24.53 at midday Monday.

The government now faces the uncomfortable choice of either selling soon and absorbing a $12 billion loss on the bailout, or holding out for an economic recovery and in doing so keeping alive a potential political quagmire. The coming talks with the United Auto Workers only further complicate matters: GM's current contract with the UAW expires Sept. 14, and while there is seemingly desire on both sides to get a new deal done quickly, the White House is leaving itself open to further criticism should talks sour or if the union is perceived to have won back too much of what it lost during the restructuring.

GM's official position is that the Treasury stake is out of its control, leaving it up to the government to decide what to do with its shares. An automotive source close to the discussions between the two sides says Treasury is monitoring the situation, but no action is expected until at least September to allow time for international markets to settle.

Just another reason for the White House to hope for a quick recovery.