WASHINGTON — The Treasury Department said Friday the total amount repaid to taxpayers for government funds used to bail out U.S. companies has surpassed, for the first time, the amount of outstanding debt.
The Treasury, in its May report to Congress on the Troubled Asset Relief Program, reported Tarp repayments reached $194 billion, which has exceeded by $4 billion the total amount of outstanding debt — $190 billion.
However, the outstanding debt amount does not include $106.36 billion that has been committed to institutions but has yet to be paid out by the Treasury. Factoring in that amount, the outstanding debt would be roughly $296 billion.
According to the report, $489.88 billion has been committed to specific institutions, and $383.52 billion of that has been paid out by Treasury. The department said it does not expect to use more than $550 billion of the $700 billion program.
A Treasury official described the manner in which the department characterized the totals as "a cash flow issue."
"Going forward, there will continue to be repayments and expenditures on both sides of the ledger," the official said, making clear that "the other money has not ultimately been dispersed yet."
With that said, the Treasury's report indicates that the department has already signed contracts with institutions regarding the already and to-be distributed funds.
Still, the Treasury's assistant secretary for financial stability, Herb Allison, in a statement described the totals as a "milestone" and said this is "further evidence that Tarp is achieving its intended objectives: stabilizing our financial system and laying the groundwork for economic recovery."
The preliminary benchmark was reached in May when the Treasury completed its sale of 1.5 billion shares of Citigroup Inc., "a transaction that provided gross proceeds of $6.18 billion to taxpayers," the Treasury said.
Tarp investments posted an additional $23 billion return, bringing total revenue to $217 billion through the end of May, according to the Treasury.
Despite the government's positive investments made through the Tarp program for banks, taxpayers could still face a loss on the program.
The Obama administration estimated last August that the total cost of Tarp would be $341 billion. The Treasury, in May, told Congress that the lifetime cost of the program had decreased to $105.4 billion.
Looking ahead, the Treasury said additional expenditures from the Tarp program are likely to focus on housing initiatives, and other programs that are tailored to help smaller banks and the securitization markets.
The department still anticipates repayments to continue to exceed the outstanding debt.