The Treasury Department estimated Tuesday that the Troubled Asset Relief Program may cost only about $30 billion.
The Treasury released a two-year retrospective report on the program showing that the total cost of Tarp will be about $50 billion but with expected repayment from American International Group, the total cost is likely to drop to $30 billion.
Although the public has blamed banks for costs from Tarp, the Treasury said the losses will be a result of auto company bailouts and the Treasury's foreclosure-prevention initiatives.
"The Tarp was, and is, an enormous commitment of taxpayer money," Tim Massad, acting assistant secretary for financial stability, said in the 98-page report. "And Tarp has been unpopular for good reason — no one likes using tax dollars to rescue financial institutions. However, by objective measures, Tarp worked. Two years later our financial system is stable."
The controversial 2008 program was for $700 billion to stabilize the financial system. Of that figure, $475 billion was allocated, with $250 billion going to bank capital programs, $82 billion going to help automobile companies, $70 billion to help bail out AIG, $22.4 billion for the Public Private Investment Program, $4.3 billion for the Term Asset-Backed Loan Facility, and $45.6 billion for the Treasury housing programs.
Only $388 billion has been spent, while the Treasury has already received $204 billion in repayments.
The main purpose of Tarp was originally to buy toxic assets but the program was later changed to focus on capital investments in banks. Tarp officially ended Sunday, although it is still winding down.
