FREE NEWSLETTER: Econintersect sends a nightly newsletter highlighting news events of the day, and providing a summary of new articles posted on the website. Econintersect will not sell or pass your email address to others per our privacy policy. You can cancel this subscription at any time by selecting the unsubscribing link in the footer of each email.

posted on 27 March 2016

Estimated Costs For Troubled Asset Relief Program TARP Rises 2 Billion Dollars

from the Congressional Budget Office

In October 2008, the Emergency Economic Stabilization Act of 2008 (Division A of Public Law 110-343) established the Troubled Asset Relief Program (TARP) to enable the Department of the Treasury to promote stability in financial markets through the purchase and guarantee of "troubled assets". Section 202 of that legislation, as amended, requires the Office of Management and Budget (OMB) to submit annual reports on the costs of the Treasury's purchases and guarantees of troubled assets.

The law also requires the Congressional Budget Office to prepare its own assessment of the TARP's costs within 45 days of OMB's report. That assessment must discuss three elements:

  • The costs of purchases and guarantees of troubled assets,

  • The information and valuation methods used to calculate those costs, and

  • The impact on the federal budget deficit and debt.

To fulfill its statutory requirement, CBO has prepared this report on the TARP's transactions that were completed, outstanding, or anticipated as of January 31, 2016. By CBO's estimate, $442 billion of the initially authorized $700 billion will be disbursed through the TARP, including $431 billion that has already been disbursed and $11 billion in additional projected disbursements. CBO's current estimate of the cost to the federal government of the TARP's transactions (also referred to as the subsidy cost) - which accounts for the realized costs of completed transactions and the estimated costs of outstanding and anticipated transactions - amounts to $30 billion.

The estimated cost of the TARP stems largely from assistance to American International Group (AIG), aid to the automotive industry, and ongoing grant programs aimed at avoiding foreclosures on home mortgages. Taken together, other transactions with financial institutions have yielded a net gain to the federal government, in CBO's estimation.

CBO's current assessment of the cost of the TARP's transactions is $2 billion higher than the $28 billion estimate shown in the agency's previous report on the TARP (issued in March 2015). That increase in the estimated cost stems from an increase in projected disbursements for mortgage programs. CBO's current estimate for all TARP transactions is $5 billion less than OMB's latest estimate of $35 billion, almost entirely because CBO projects a lower cost for those mortgage programs.

When the TARP was created, the U.S. financial system was in a precarious condition, and the transactions undertaken involved substantial financial risk for the federal government. Nevertheless, the net realized costs directly associated with the TARP, when taken in isolation, have been near the low end of the range of possible outcomes anticipated when the program was launched - in part because funds invested, loaned, or granted to participating institutions through the Federal Reserve and government programs other than the TARP helped limit those costs.

[read the full report]

>>>>> Scroll down to view and make comments <<<<<<

Click here for Historical News Post Listing

Make a Comment

Econintersect wants your comments, data and opinion on the articles posted.  As the internet is a "war zone" of trolls, hackers and spammers - Econintersect must balance its defences against ease of commenting.  We have joined with Livefyre to manage our comment streams.

To comment, using Livefyre just click the "Sign In" button at the top-left corner of the comment box below. You can create a commenting account using your favorite social network such as Twitter, Facebook, Google+, LinkedIn or Open ID - or open a Livefyre account using your email address.

You can also comment using Facebook directly using he comment block below.

Econintersect Contributors


Print this page or create a PDF file of this page
Print Friendly and PDF

The growing use of ad blocking software is creating a shortfall in covering our fixed expenses. Please consider a donation to Econintersect to allow continuing output of quality and balanced financial and economic news and analysis.

Take a look at what is going on inside of
Main Home
Analysis Blog
Comments on Feyerabend’s ‘Against Method’, Part III
Taking a Wrench to Healthcare
News Blog
Top 10 American Misconceptions about China (Version 3)
Documentary Of The Week: Job Buffers Are More Efficient Than Unemployment Buffers
Typing Is The New Talking
Outsourcing Viewed As The Top Threat To U.S. Jobs
SOS, Extra Savings Needed For An Adequate Pension
Bob Dylan's Nobel Prize - And What Really Defines Literature
What We Read Today 25 October 2016
Baby Remarkably Survives Being Born With Heart Beating Outside Her Chest
October 2016 Conference Board Consumer Confidence Declines
Richmond Fed Manufacturing Survey Remains In Contraction In October 2016.
October 2016 Chemical Activity Barometer Continues to Signal Improving Economic Growth
Case-Shiller Home Price Index August 2016 Year-over-Year Rate of Growth Marginally Improves
Russia Falls Into Old Habits
Investing Blog
This Or That? Technical Report 25 October 2016
Opinion Blog
What Triggers Collapse?
The Beer Goggles Stock Market
Precious Metals Blog
Inflation Surging As Platinum Signals Stock Market Decline
Live Markets
25Oct2016 Market Close: US Stock Market Indexes Closed Down Fractionally, Investors Remain Concerned With Friday's Fed Rate Change, Crude And US Dollar Down, Gold Up
Amazon Books & More

.... and keep up with economic news using our dynamic economic newspapers with the largest international coverage on the internet
Asia / Pacific
Middle East / Africa
USA Government

Crowdfunding ....



Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day


Asia / Pacific
Middle East / Africa
USA Government

RSS Feeds / Social Media

Combined Econintersect Feed

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution



  Top Economics Site Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2016 Econintersect LLC - all rights reserved