New Estimates Cut TARP Cost by 25 Percent

The Troubled Asset Relief Program, which the federal government used to bail out many of the nation’s banks and automakers, will cost taxpayers an estimated $24 billion. That’s 25 percent less than the previous estimate.

The new estimate comes from the Congressional Budget Office, the nonpartisan scorekeeper for Congress on matters related to federal spending.

 TARP’s lower cost is primarily due to a better-than-expected return on the sale of stock of insurer American International Group, one of the major beneficiaries of the 2008 bailout. The AIG rescue is now estimated to cost TARP about $14 billion. In March, the CBO estimated that the AIG bailout would cost Treasury $22 billion.

Congress passed TARP in October 2008 when the financial markets melted down and credit in the nation’s banking system froze up. While $700 billion was approved under the program, only $414 billion was dispersed.

Read more on CNN Money.

Related Story: Missouri Banks Work to Pay Back Bailout Funds.

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