The Troubled Asset Relief Program will cost taxpayers less than expected.
Transactions through Tarp will total roughly $21 billion, according to Congressional Budget Office estimate released last week. That is down 12.5% from the CBO's most recent estimate released in October 2012.
The revised estimate reflects an increase in the market value of the government's investment in General Motors (GM). The price of the automaker's common stock has increased about 36% in the past six months.
The Treasury Department said recently that it owns about 242 million shares in GM.
"CBO's estimate of the cost of assistance to the auto industry has dropped from $20 billion to $17 billion because the market price for General Motors common stock increased significantly between October 2012 and April 2013, thereby enabling Treasury to sell its investment at a price higher than what was available in October and increasing the value of the Treasury's remaining shares," the CBO wrote on May 23.
The government also stands to realize a gain of $10 billion from financial assistance to banks and other financial institutions, according to the CBO. The tally includes a gain of $25 billion, offset partly by a cost of $15 billion for assistance to American International Group (AIG).
The estimate also includes a gain of $17 billion for assistance to banks that participated in the Capital Purchase Program, through which Treasury bought $205 billion shares of preferred stock from 707 financial institutions.
The gain includes $22 billion from banks that have redeemed their shares, minus $3 billion from institutions that declared bankruptcy or were taken over by the Federal Deposit Insurance Corp., along with a cost of $2 billion for the government's outstanding investments, the CBO said.