The $21 Billion TARP

Yesterday, the CBO released its latest estimate of the subsidy cost of the Troubled Asset Relief Program (TARP). The estimate serves as a demonstration of how little of TARP is still operating in a major fashion, as most of the cost has not changed since the last score in October 2012. The overall cost of TARP dropped from $24 billion (the previous estimate in October 2012).

The main movement comes from the auto industry assistance, which dropped from an estimated cost of $20 billion to $17 billion. This movement is not particularly surprising since GM's share price has risen significantly -- about 40 percent -- since October 2012. Thus, the federal government's gains on its remaining holdings in GM will be greater than previously expected.

^{Source: CBO}

Most of the rest of TARP has largely stayed the same. The net gain from financial institutions -- the net of the Capital Purchase Program (the original centerpiece of TARP), support for Citigroup and Bank of America, and the cost of supporting AIG -- fell by $1 billion while the gain from investment partnerships went up by $1 billion.

Estimates for TARP continue to fall from the original score and it looks as if the loss to the federal government will be small, an unexpected but welcomed development.