The Treasury Department has again lowered its estimate of the cost for the government's unpopular $700 billion bailout of the financial sector.
On Friday the Treasury said it now expects the Troubled Asset Relief Program will ultimately cost taxpayers $105.4 billion, down from its most recent official estimate of $117 billion and earlier estimates of $120 billion and $341 billion.
During a Senate Finance Committee hearing earlier this month, Treasury Secretary Tim Geithner had projected that the cost for Tarp would likely be less than $100 billion.
The agency's latest revision largely reflects rising prices for Citigroup Inc. common stock, of which the Treasury is a major holder.
The Treasury received 7.7 billion Citigroup shares as part of its effort to stabilize the company during the financial crisis. When it obtained the shares each had a value of $3.25. The value had risen 80 cents to $4.05 a share by the agency's March 31 cost re-evaluation date.
But Citigroup's stock has fallen since then. On Friday the shares closed at $3.75.
The Treasury said a stronger-than-anticipated rebound in the auto sector, higher-than-expected repayments from banks that received bailout dollars and better performance by the insurer American International Group Inc. also drove down its cost estimate.
So far Tarp participants have repaid the Treasury $190 billion.
"We're in a stronger position sooner than anyone predicted," said Herb Allison, the Treasury's assistant secretary overseeing financial stability.
The Treasury said it now expects its AIG rescue to cost $2.9 billion less than the $48 billion it had previously estimated.
The agency said its investments in the automobile industry, on which the government was expected to lose about $28 billion, also are looking better.
"While we will never know for certain what would have happened without Tarp, there is broad agreement today that because of Tarp and other government actions, the United States averted a potentially catastrophic failure of the financial system," Allison said in a letter to lawmakers Friday.