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 Stimulus.org.