How is the Troubled Asset Relief Program (TARP) like Wesson oil? It's all coming back except for one tablespoon.
In its latest report on the TARP, the Congressional Budget Office (CBO) estimates that the eventual cost will only be $25 billion.
So far, the program has disbursed $389 billion, and when all is said and done, that total will rise to $433 billion. Both of these figures are far less than the original $700 billion authorization.
To date, the program has been repaid $216 billion. Much of the remaining expenditures were used to purchase assets that will eventually be resold to make up nearly all of the remaining amount.
The CBO analysis only accounts for the direct, anticipated financial costs of the program and does not include government revenues that were saved when the economy was kept from imploding. Similarly, it omits the wider benefits to the economy from those same actions.
For instance, the Center for Automotive Research estimate that the $80 billion in TARP expenditures that went to GM and Chrystler saved the economy approximately $100 billion in further income losses.
The record is all the more remarkable given the rocky start of the program. Recall that the Bush administration requested the original $700 billion authorization and got Congressional approval late in its term (Oct. 2008) but then almost immediately decided not to use the funds for their original purpose--buying troubled assets. A substantial portion of the program was handed off to the Obama administration during its transition, and the new administration, in turn, had to contend with the sideshow over executive pay at the banks that had been assisted.
The TARP continues to fry up the Party of No and their Tea Party crybabies. Ultimately, though, the program is turning out to be better than it was cooked up to be--except perhaps for one $25 billion tablespoon.
