Originally projected to have made a profit for taxpayers, a new analysis by the Congressional Budget Office (CBO) estimates that the Troubled Asset Relief Program instead cost $24 billion.
“The ultimate losses from TARP will not come from that first round of spending, as all of those initial bank investments have been repaid, but instead from the use of TARP funds to help smaller banks (minimally), as well as the extension of the program to pump $79 billion into automakers General Motors and Chrysler and contribute to the bailout of insurer American International Group,” Forbes reported.
Those three assistance programs totaled $51 billion, according to the CBO, though they anticipate the government will receive roughly $26 billion from other programs, covering some of the loss.
Following the controversial bank bailout in 2008, some were concerned the government might never see the money again.
The estimate of $24 billion is $8 billion less than a previous assessment that was released in March, and differs from the Office of Management and Budget (OMB) estimates, putting TARP at a cost of $63 billion.
“The decrease in the estimated cost stems primarily from an increase in the market value of the government’s investments in AIG,” the CBO said in a release.
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