US Troubled Asset Relief Programme (Tarp), which risked up to $700bn (£450bn) of government funds to bail out troubled banks and automakers, will cost taxpayers a mere $25bn, according to an estimate released yesterday by the nonpartisan Congressional Budget Office (CBO).
CBO’s latest assessment of the widely reviled programme is lower even than the Obama administration’s own estimate of less than $50bn, which was criticised as too rosy after it was issued at the end of September.
“Clearly, it was not apparent when the TARP was created two years ago that the cost would turn out to be this low,” CBO said in its report.
With bailed-out firms returning to health, the government will spend less than previously thought on assistance to insurer AIG and automakers like General Motors, CBO said.
Additional stock repurchases by formerly troubled Wall Street firms
and lower-than-expected participation in mortgage programmes has also lowered the cost, CBO said.