And the TARP Subsidy Keeps Growing. . .

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Buried in prepared testimony by the director of the Congressional Budget Office on Jan. 28 are some eye-catching numbers that reflect the potential cost of the bailout for taxpayers. The CBO’s Douglas Elmendorf told the Senate Budget Committee that $94 billion of the $293 billion allocated to banks and other institutions under the Treasury Department’s Troubled Asset Relief Program (TARP) as of Jan. 22 could wind up being subsidies. In short, CBO analysts estimate that almost a third of the money spent by Treasury on stock purchases, loans and asset guarantees may not be recovered, meaning taxpayers would absorb the cost. And here’s a more sobering statement, again from Elmendorf: “Of the $700 billion that the TARP is expected to disburse before the end of December of this year [2009], CBO anticipates that the subsidy cost (after adjusting for market risk) will be about $200 billion.” The TARP Subsidies page of the Subsidyscope Web site provides a breakdown of all the CBO projections to date.

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  • Chet Gersten

    While Sen. Judd Gregg had a $3 million investment with Bank of America he authored the TARP bailout of the banks.

    http://www.opensecrets.org