Taxpayer Tab for Wall Street Bailout Falls to $25 Billion

Tuesday, 30 Nov 2010 07:48 AM

 

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The U.S. Troubled Asset Relief Program, which risked up to $700 billion of government funds to bail out troubled banks and automakers, will cost taxpayers a mere $25 billion, according to an estimate released Monday by the nonpartisan Congressional Budget Office.

CBO's latest assessment of the widely reviled program is lower even than the Obama administration's own estimate of less than $50 billion, which was criticized 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 programs has also lowered the cost, CBO said.

With the country still struggling to emerge from the deepest recession since the 1930s, many backers of the bailout have paid a heavy political price. Republicans like Senator Bob Bennett and dozens of Democrats lost their seats this year in part due to their support for the program.

© 2014 Thomson/Reuters. All rights reserved.

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