Bailout report adds up the costs
A Treasury official put one eye-popping estimate at up to $23.7 trillion, but another official put on the brakes.
U.S. taxpayers could be on the hook for up to $23.7 trillion in aid intended to bolster the economy and bail out financial companies, according to a report released yesterday by a Treasury Department official.
The Treasury's original $700 billion bank bailout, the Troubled Asset Relief Program, or TARP, represents just a fraction of all authorized federal support to resuscitate the U.S. financial system, said the report by Neil Barofsky, special inspector general for TARP. Congress passed the TARP program in October after brokerage firms and banks were jeopardized by rising defaults on mortgage-backed securities.
"TARP has evolved into a program of unprecedented scope, scale, and complexity," Barofsky said in testimony prepared for a hearing today before the House Committee on Oversight and Government Reform.
His $23.7 trillion figure, or $80,000 for every American, represents a maximum. The report said $4.7 trillion had actually been spent so far.
Treasury spokesman Andrew Williams said that Barofsky's numbers were flawed because they did not take into account assets that back those programs or fees charged to recoup some costs shouldered by taxpayers.
"These estimates of potential exposures do not provide a useful framework for evaluating the potential cost of these programs," Williams said. "This estimate includes programs at their hypothetical maximum size."
Barofsky's estimates consist of $6.8 trillion in aid offered by the Federal Reserve, $2.3 trillion in programs offered by the Federal Deposit Insurance Corp., $7.4 trillion in TARP and other aid from the Treasury, and $7.2 trillion in federal money for Fannie Mae, Freddie Mac, credit unions, Veterans Affairs, and other federal programs.
His figures do not include funds from the $787 billion economic stimulus package, which was passed in February to try to help end the recession.
Barofsky offered criticism in a separate quarterly report of Treasury's implementation of TARP, saying the department has "repeatedly failed to adopt recommendations" needed to provide transparency and fulfill the administration's goal to implement TARP "with the highest degree of accountability."
As a result, taxpayers don't know how TARP recipients are using the money or the value of the investments, he said in that report.
Bailout Tally
An estimate of funds authorized for the federal financial bailout program.*
$2.3 trillion from
the Federal Deposit Insurance Corp.
$6.8 trillion from
the Federal Reserve.
$7.2 trillion for the mortgage companies Freddie Mac and Fannie Mae, and for credit unions, veterans programs, and other federal aid.
$7.4 trillion from the Treasury Department, which includes the Troubled Asset Relief Program.
*Figures are authorized maximums and do not represent money
actually spent.
SOURCE: Bloomberg News
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