PBGC takeover of pensions at the two auto makers also would affect their retirees, who could see their pension benefits slashed by as much as 60% because federal law limits how much the agency can pay in annuity benefits.

The PBGC could be on the hook for the pensions of as many as 925,000 retired auto workers, of which GM had about 670,000 people and Chrysler 255,000. Such a burden would be unprecedented and would likely increase the PBGC's deficit, which already stands at about $11 billion. The PBGC currently pays pension benefits to about 630,000 retirees.

Under current law, the maximum guaranteed pension amount the PBGC can pay to a 65-year-old is $54,000 a year, and the maximum for a 50-year-old is $18,900 annually.