There are two qualifiers with this, the first being that the estimate is low; it was made when GM's stock price was $22.20, but at the close of trading on of August 17 the stock price was $22.01. The second and much more important qualifier is that Treasury only loses $26 billion, give or take, if it actually sells the stock. Treasury's report to Congress on the state of its investment doesn't mean a sale is imminent, it's just an update. The only thing we've heard about the date of a sale is that Treasury has no immediate plans on such, preferring to wait until the market catches up to the progress it feels GM has made.
At one time the government expected to lose $44 billion on the auto bailout. Even if it takes a $26 billion bath on GM and adds the $1.3 billion loss on Chrysler, that's still a 33-percent improvement on what could have been. And that's called "looking at the bright side."