US Treasury Says TARP Costs $200 Billion Less Than Forecast
Dec. 7 (Bloomberg) -- The Obama administration expects thecost of the Troubled Asset Relief Program to be $200 billionless than projected, helping to reduce the size of the budgetdeficit, a Treasury Department official said yesterday.
The administration forecast in August that the TARP wouldultimately cost $341 billion, once banks had repaid thegovernment for capital injections and other investments.Congress authorized $700 billion for the program in October2008.
Banks have paid back $71 billion so far, and a plannedrepayment by Bank of America Corp. would bring that figure to$116 billion. Treasury Secretary Timothy Geithner said in aninterview last week that he expects the TARP to get as much as$175 billion in repayments from banks by the end of 2010.
In the fiscal year 2009, which ended Sept. 30, the Treasuryinvested about $245 billion into U.S. banks to shore up thefinancial system. In the long run, those investments areexpected to turn a profit of $19 billion, compared with aprevious estimate of a $76 billion cost, the official said.
For the last fiscal year, the government’s net cost for itsinvestments in banks, auto companies and insurers came to $42billion, the official said, about $110 billion less thanprojected in August.
To contact the reporter on this story:Rebecca Christie in Washington at rchristie4@bloomberg.net;
Last Updated: December 7, 2009 00:42 ESTSource: Bloomberg
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