Estimate of TARP losses falls to $25 billion
The projected cost of the $700-billion financial bailout fund drops sharply, according to a new report from the nonpartisan Congressional Budget Office.
By Jim Puzzanghera,
Los Angeles Times
November 30, 2010
Reporting from Washington
The projected cost of the $700-billion financial bailout fund — initially feared to be a huge hit to taxpayers — continues to drop, with the nonpartisan Congressional Budget Office estimating Monday that losses would amount to just $25 billion.
That's a sharp drop from the CBO's last estimate, in August, of a $66-billion loss for the Troubled Asset Relief Program, known as TARP. Going back to March, the budget office estimated that the program would cost taxpayers $109 billion.
The new, more optimistic forecast largely reflects money the Treasury Department has received as banks have repaid their loans and repurchased stock warrants. It also takes into account lower estimated costs for assistance to insurance giant American International Group Inc. and General Motors Corp., which recently held a highly successful initial public offering, the CBO said.
"Clearly, it was not apparent when the TARP was created two years ago that the cost would turn out to be this low," the budget office said in its report. "At that time, the U.S. financial system was in a precarious condition, and the transactions envisioned and ultimately undertaken through the TARP engendered substantial financial risk for the federal government."
(More here.)
By Jim Puzzanghera,
Los Angeles Times
November 30, 2010
Reporting from Washington
The projected cost of the $700-billion financial bailout fund — initially feared to be a huge hit to taxpayers — continues to drop, with the nonpartisan Congressional Budget Office estimating Monday that losses would amount to just $25 billion.
That's a sharp drop from the CBO's last estimate, in August, of a $66-billion loss for the Troubled Asset Relief Program, known as TARP. Going back to March, the budget office estimated that the program would cost taxpayers $109 billion.
The new, more optimistic forecast largely reflects money the Treasury Department has received as banks have repaid their loans and repurchased stock warrants. It also takes into account lower estimated costs for assistance to insurance giant American International Group Inc. and General Motors Corp., which recently held a highly successful initial public offering, the CBO said.
"Clearly, it was not apparent when the TARP was created two years ago that the cost would turn out to be this low," the budget office said in its report. "At that time, the U.S. financial system was in a precarious condition, and the transactions envisioned and ultimately undertaken through the TARP engendered substantial financial risk for the federal government."
(More here.)
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