The Newest TARP Estimate

CBO has released its newest cost estimate of the Troubled Asset Relief Program (TARP), projecting it to cost $32 billion over its lifetime, which is $2 billion lower than it estimated last December. The change in the cost estimate represents a reduction in the costs of AIG and GM support netted against an increase in the cost estimate of the mortgage programs.

A breakdown of the cost estimate by category is presented below.

Subsidy Cost Estimate (billions)
Area December 2011 March 2012 Maximum Amount Disbursed
Capital Purchase Program -17 -17 205
Citigroup and Bank of America -8 -8 40
Community Development Capital Initiative 0 0 1
Assistance to AIG 25 22 68
Subtotal, Financial Institutions 1 -3 313
Auto Company Assistance 20 19 80
Investment Partnerships 0 0 18
Mortgage Programs 13 16 3
Total 34 32 414

CBO has revised down its estimate of AIG support due to increased AIG stock prices, something we surmised three weeks ago would happen. Similarly, GM support has become less costly due to rising GM stock prices. Finally, the cost of mortgage programs has gone up since December due to Obama Administration initiatives to expand eligibility for mortgage modification programs and thus the amount of money that will be provided in the program.

We'll continue tracking TARP at