The Troubled Asset Relief Program will cost taxpayers far less than initially feared, with the price tag likely to total about $25 billion, according to the Congressional Budget Office.
“It was not apparent when the TARP was created two years ago that the costs would be this low,” the nonpartisan agency said today in a report seconding administration predictions. “Because the financial system stabilized and then improved, the amount of funds used by the TARP was well below the $700 billion initially authorized and the outcomes of most transactions made through the TARP were favorable for the federal government.”
The Treasury Department had predicted in October that the $700 billion could end up costing taxpayers as little as $29 billion, less than half of what it took to clean up the 1980s savings-and-loan crisis.
Federal aid to automakers, as well as to American International Group Inc., has ended up costing less than expected, the CBO said, while banks receiving bailout funds repaid their TARP money sooner than projected. In addition, participation in a program designed to aid struggling homeowners with their mortgages has been lower than forecast. The agency had predicted in August that the TARP program, which was created in October 2008, would cost $66 billion.
“It was not apparent when the TARP was created two years ago that the costs would be this low,” the nonpartisan agency said today in a report seconding administration predictions. “Because the financial system stabilized and then improved, the amount of funds used by the TARP was well below the $700 billion initially authorized and the outcomes of most transactions made through the TARP were favorable for the federal government.”
The Treasury Department had predicted in October that the $700 billion could end up costing taxpayers as little as $29 billion, less than half of what it took to clean up the 1980s savings-and-loan crisis.
Federal aid to automakers, as well as to American International Group Inc., has ended up costing less than expected, the CBO said, while banks receiving bailout funds repaid their TARP money sooner than projected. In addition, participation in a program designed to aid struggling homeowners with their mortgages has been lower than forecast. The agency had predicted in August that the TARP program, which was created in October 2008, would cost $66 billion.
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http://www.bloomberg.com/news/2010-11-30/wall-street-bailout-to-cost-taxpayers-25-billion-cbo-says.html
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