CBO

CONGRESSIONAL BUDGET OFFICE

SECOND AND D STREETS, S.W.

WASHINGTON, D.C. 20515

Report on the

Troubled Asset Relief Program—

March 2011
Pub. No. 4253
The Congress of the United States O Congressional Budget Office

A

REPORT

CBO

Report on the 

Troubled Asset Relief Program—

March 2011
CBO

Note

Numbers in the text and tables may not add up to totals because of rounding.
Preface

CBO

In October 2008, the Emergency Economic Stabilization Act of 2008 established the 

Troubled Asset Relief Program (TARP) to enable the Department of the Treasury to purchase 

or insure troubled assets as a way to promote stability in financial markets. Section 202 of that 

legislation requires the Congressional Budget Office (CBO) to prepare a report on those 

transactions within 45 days of a report issued by the Office of Management and Budget 

(OMB) on the TARP’s activities. This fifth statutory report from CBO on the TARP’s 

transactions follows the report that OMB submitted to the Congress on February 14, 2011.

Avi Lerner of CBO’s Budget Analysis Division prepared the report under the supervision 

of Peter Fontaine, Theresa Gullo, and Jeffrey Holland. Francesca Castelli, Chad Chirico, 

Wendy Kiska, and Deborah Lucas contributed significantly to the analysis. Christine Bogusz 

edited the report, Kate Kelly proofread it, and Jeanine Rees prepared it for publication. 

Monte Ruffin oversaw the printing of the report, and Linda Schimmel handled the print 

distribution. The report is available on CBO’s Web site (www.cbo.gov).

Douglas W. Elmendorf

Director

March 2011

Contents

CBO

Estimating the Costs of the TARP 2

Transactions of the TARP 3

Capital Purchases and Other Support for Financial Institutions 3

Financial Assistance to the Automotive Industry 5

Investment Partnerships 6

Mortgage Programs 6

Comparison of CBO’s and OMB’s Estimates 7

Changes from CBO’s November Estimates 7

Tables

1. Activities of the Troubled Asset Relief Program 2

2. Actual and Projected Cash Disbursements of the 

Troubled Asset Relief Program 3

3. Estimated Subsidy Cost or Gain over the Life of the 

Troubled Asset Relief Program 4

CBO

Report on the Troubled Asset Relief Program— 

March 2011

In October 2008, the Emergency Economic Stabilization Act of 2008 (Division A of Public Law 110-343) 

established the Troubled Asset Relief Program (TARP) to 

enable the Department of the Treasury to promote stability in financial markets through the purchase and guarantee of “troubled assets.”1

 Section 202 of that legislation 

requires the Office of Management and Budget (OMB) 

to submit semiannual reports on the costs of the Treasury’s purchases and guarantees of troubled assets.2

 The 

law also requires the Congressional Budget Office (CBO) 

to prepare an assessment of each OMB report within 

45 days of its issuance. That assessment must discuss 

three elements:

 The costs of purchases and guarantees of troubled 

assets,

 The information and valuation methods used to 

calculate those costs, and

 The impact on the federal budget deficit and debt.

To fulfill its statutory requirement, CBO has prepared 

this report on transactions completed, outstanding, and 

anticipated under the TARP as of March 3, 2011. CBO 

estimates that the cost to the federal government of the 

TARP’s transactions (also referred to as the subsidy cost), 

including grants for mortgage programs that have not 

been made yet, will amount to $19 billion. That cost 

stems largely from assistance to American International 

Group (AIG), aid to the automotive industry, and 

grant programs aimed at avoiding foreclosures. Other 

transactions with financial institutions will, taken 

together, yield a net gain to the federal government, in 

CBO’s estimation.

CBO’s current estimate of the cost of the TARP’s transactions is $6 billion less than the $25 billion estimate 

shown in the agency’s previous report on the TARP 

(issued in November 2010).3

 The reduction in the estimated cost results primarily from a lower assessment of 

losses from assistance provided to the automotive industry. CBO’s current estimate is well below OMB’s latest 

estimate of $64 billion, largely because of different assessments of the cost of the Treasury’s housing programs 

under the TARP.

When the TARP was created, the U.S. financial system 

was in a precarious condition, and the transactions envisioned and ultimately undertaken engendered substantial 

financial risk for the federal government. The costs 

directly associated with the TARP, when taken in isolation, have come out toward the low end of the range of 

possible outcomes anticipated when the program was 

1. The law defines troubled assets as “(A) residential or commercial 

mortgages and any securities, obligations, or other instruments 

that are based on or related to such mortgages, that in each case 

was originated or issued on or before March 14, 2008, the 

purchase of which the Secretary determines promotes financial 

market stability; and (B) any other financial instrument that the 

Secretary, after consultation with the Chairman of the Board of 

Governors of the Federal Reserve System, determines the purchase 

of which is necessary to promote financial market stability, but 

only upon transmittal of such determination, in writing, to the 

appropriate committees of Congress.”

2. OMB’s most recent report on the TARP was submitted on 

February 14, 2011, as part of Analytical Perspectives, Budget of the 

United States Government, Fiscal Year 2012, www.whitehouse.gov/

sites/default/files/omb/budget/fy2012/assets/spec.pdf.

3. See Congressional Budget Office, Report on the Troubled Asset 

Relief Program—November 2010 (November 2010).
2 REPORT ON THE TROUBLED ASSET RELIEF PROGRAM—MARCH 2011

CBO

Table 1.

Activities of the Troubled Asset 

Relief Program

Sources: Congressional Budget Office; Department of the Treasury.

Note: Transactions are as of March 3, 2011.

a. Other funds were made available through asset guarantee 

programs, but no disbursements were made from those funds. 

b. Includes realized losses on sales of General Motors stock.

c. Authority for the Troubled Asset Relief Program was originally 

set at a maximum of $700 billion; however, that total was 

reduced to $475 billion in the Dodd–Frank Wall Street Reform 

and Consumer Protection Act (Public Law 111-203).

d. The subsidy cost is estimated using procedures similar to those 

specified in the Federal Credit Reform Act of 1990, but with an 

adjustment for market risk as directed by the Emergency 

Economic Stablization Act (Division A of Public Law 110-343).

launched; however, funds invested, loaned, or granted to 

participating institutions through the Federal Reserve 

and other government entities helped limit those costs. 

As a result, only $432 billion will be disbursed through 

the TARP, CBO estimates, well below the $700 billion 

initially authorized (see Table 1). Overall, the outcomes 

of most transactions made through the TARP were favorable for the federal government.

Estimating the Costs of the TARP 

CBO values the TARP’s asset purchases and guarantees 

using procedures similar to those specified in the Federal 

Credit Reform Act of 1990, but with an adjustment for 

market risk as directed by the Emergency Economic Stabilization Act. The total estimated cost of the TARP 

reported here is a combination of prospective and realized 

costs. In brief:

 Projected future cash flows are discounted to a present 

value using a discount rate that accounts for: (a) the 

fact that money in hand now is worth more than 

the same amount received in the future; and (b) the 

premium that a private investor would require as 

compensation for the risk of the transaction. The risk 

premium used by CBO varies depending on the 

riskiness of the transaction.

 Cash flows that have already occurred—for instance, 

the Treasury’s purchase of assets or its receipt of dividends or debt repayments—are converted to a present 

value using the rate on Treasury securities that most 

closely matches the time period for which the transaction was outstanding. 

To explain more thoroughly, transactions that have been 

completed are valued by bringing all cash flows forward 

to the date of analysis using the Treasury’s borrowing rate 

for the relevant period. For investments the Treasury has 

written off as uncollectible, the subsidy cost is considered 

to be 100 percent of the disbursed amount. Thus, CBO’s 

estimate of the value of each completed transaction 

equals the realized gain or loss for the government. 

Transactions that are outstanding—that is, transactions 

that have been initiated by the Treasury but are not yet 

completed—are valued by converting past cash flows to 

present values and combining them with the current values of assets held by the Treasury. For example, the estimated net cost of shares of preferred stock held through 

the TARP equals what the Treasury paid to acquire the 

shares (brought forward to the present using the Treasury’s borrowing rate) minus the current value of the 

shares (based on market prices, if available) and any 

dividend payments already received by the government 

(also brought forward to the present using the Treasury’s 

borrowing rate). 

Transactions that CBO anticipates will occur are valued 

by discounting future cash flows to the present. For those 

transactions, such as future purchases made as part of the 

Public–Private Investment Program, the estimated cost 

equals the difference between what the Treasury is 

expected to pay and what the Treasury is expected to 

obtain in return, discounted to the date of the analysis on 

a risk-adjusted basis.

Amount of Principala

Repaid 244

Written Offb 11

Outstanding 156 ___

Subtotal 410

Additional Disbursements Anticipated 22 ___

Totalc 432

Estimated Subsidy Costd 19

Billions of Dollars
REPORT ON THE TROUBLED ASSET RELIEF PROGRAM—MARCH 2011 3

CBO

Table 2.

Actual and Projected Cash Disbursements of the Troubled Asset 

Relief Program

(Billions of dollars)

Sources: Congressional Budget Office; Department of the Treasury.

Notes: Amounts shown are as of March 3, 2011.

AIG = American International Group; SBA = Small Business Administration; * = between zero and $500 million.

a. The Treasury also agreed to provide $5 billion to cover potential losses on Citigroup’s assets; however, those losses did not occur, so no 

disbursements were made.

b. The Treasury has currently committed $4 billion to absorb losses on loans made by the Federal Reserve through the Term Asset-Backed 

Securities Loan Facility. Many of those loans remain outstanding, and no losses have occurred to date; however, the Treasury provided 

$100 million in initial funding.

c. Of the $50 billion initially announced for the Home Affordable Modification Program, which includes funding for state housing finance 

agencies and the Federal Housing Administration, $13 billion will eventually be disbursed, CBO estimates.

Transactions of the TARP 

The TARP’s transactions fall into four broad categories:

 Capital purchases and other support for financial 

institutions,

 Financial assistance to the automotive industry,

 Investment partnerships designed to increase liquidity 

in securitization markets, and

 Mortgage programs.

Capital Purchases and Other Support for Financial 

Institutions

To provide support for financial institutions, the federal 

government disbursed $313 billion, most of which has 

already been repaid, and is projected to provide an additional $2 billion (see Table 2). CBO estimates a net gain 

to the government of $9 billion from those transactions 

(see Table 3).

Capital Purchase Program. Through the TARP’s Capital 

Purchase Program (CPP), the Treasury purchased

Support for Financial Institutions

Capital Purchase Program 205 171 3 30 0

Additional assistance to Citigroup 

and Bank of Americaa 40 40 0 0 0

Community Development Capital Initiative 1 0 0 1 0

Assistance to AIG 68 2 0 66 2 ___ ___ ___ ___ ___

Subtotal 313 213 3 97 2

Assistance to the Automotive Industry 80 29 8 42 2

Investment Partnerships

Term Asset-Backed Securities Loan Facilityb * 00 * *

Public–Private Investment Program 16 1 0 15 6

SBA 7(a) Purchase Program * * 0 * 0 ___ ___ ___ ___ ___

Subtotal 16 1 0 16 7

1 0 0 1 12 ____ ____ ___ ____ ___

Total 410 244 11 156 22

Repaid

Principal

Disbursed

Results to Date for Principal Disbursed

Mortgage Programsc

Written Off Disbursements

Additional

Anticipated

Outstanding
4 REPORT ON THE TROUBLED ASSET RELIEF PROGRAM—MARCH 2011

CBO

Table 3.

Estimated Subsidy Cost or Gain over 

the Life of the Troubled Asset Relief 

Program

(Billions of dollars)

Sources: Congressional Budget Office; Office of Management and 

Budget.

Notes: CBO’s estimates are derived from data as of March 3, 2011, 

whereas OMB used data as of December 31, 2010.

AIG = American International Group; SBA = Small Business 

Administration; * = between -$500 million and 

$500 million.

$205 billion in shares of preferred stock from 707 financial institutions.4

 As of March 3, 2011, $171 billion (or 

83 percent) of that preferred stock had been repurchased 

by issuing institutions. CBO estimates a net gain to the 

government of $16 billion from the CPP. 

Preferred stock purchased through the CPP carries a 

promised dividend equal to 5 percent of the government’s 

investment for the first five years and 9 percent thereafter. 

The shares of preferred stock are accompanied by warrants that allow the government to purchase common 

stock equal in cost to 15 percent of the amount invested 

in preferred stock; the warrants specify that the price at 

which the government may purchase shares is the average 

price of the institution’s common stock over the 20 trading days preceding the date of the government’s investment.5

 Financial institutions that are not publicly owned 

provided the government with additional shares of preferred stock instead of warrants. Under the terms of the 

CPP, participating financial institutions are subject to 

restrictions on the compensation they provide to their 

executives, the dividends they pay to their shareholders, 

and the amount of common stock they repurchase.

The net gain of $16 billion estimated for the CPP 

comprises the following:

 Gains of more than $19 billion from transactions with 

banks that have fully repaid the Treasury’s investment. 

That amount includes a roughly $7 billion net gain to 

the government realized from the sale of common 

shares of Citigroup; those shares had been acquired in 

exchange for $25 billion of preferred stock that the 

Treasury had purchased through the CPP. 

 Unrecoverable losses of $3 billion from institutions 

that declared bankruptcy, were taken over by the 

Federal Deposit Insurance Corporation, or were 

authorized by the Treasury to renegotiate the terms 

of the investment.

 A net subsidy cost of less than $500 million for the 

program’s outstanding investments, including dividends paid and the present value of preferred shares 

and warrants still held by the Treasury.

Additional Assistance to Citigroup and Bank of America.

In addition to receiving funds from the CPP, two financial institutions—Citigroup and Bank of America—

also received supplementary support through the 

Treasury’s Targeted Investment Program (TIP). All of 

that supplementary support has since been repaid or 

terminated, resulting in a $7 billion net gain to the 

federal government. 4. “Preferred stock” refers to shares of equity that provide a specific 

dividend to be paid before any dividends are paid to those who 

hold common stock and that take precedence over common stock 

in the event of a liquidation.

Support for Financial Institutions

Capital Purchase Program -16 -6 -10

Additional assistance to Citigroup

and Bank of America -7 -7 *

** *

Assistance to AIG 14 12 2 ___ ___ ___

Subtotal -9 -1 -8

Assistance to the Automotive 

Industry 14 20 -6

Investment Partnerships

Term Asset-Backed Securities 

Loan Facility * * 1

Public–Private Investment Program * * *

SBA 7(a) Purchase Program * * * ___ ___ ___

Subtotal 1 * 1

Mortgage Programs 13 46 -33 ___ ___ ___

Total 19 64 -45

or Gain (-)

Subsidy Cost

Estimated

CBO OMB Difference

Community Development

Capital Initiative

5. A “warrant” gives the holder the option, but not the obligation, to 

purchase stock at a fixed price.
REPORT ON THE TROUBLED ASSET RELIEF PROGRAM—MARCH 2011 5

CBO

Citigroup and Bank of America each received $20 billion 

in capital through the TIP. Furthermore, the Treasury 

agreed to absorb up to $5 billion in potential losses on a 

$301 billion pool of Citigroup’s assets, and the Treasury 

announced plans to guarantee a pool of Bank of 

America’s assets. 

On December 23, 2009, Citigroup repaid the $20 billion 

in financing it received through the TIP and canceled the 

loss-sharing agreement. In exchange for accepting early 

termination of that agreement, the Treasury retained over 

$2 billion of Citigroup preferred stock, which it sold on 

September 30, 2010. Bank of America also repaid the 

$20 billion in financing it received through the TIP; the 

plan for the Treasury to guarantee a pool of Bank of 

America’s assets was never implemented.6

Community Development Capital Initiative. The Community Development Capital Initiative (CDCI) has a 

structure similar to that of the CPP, but it invested in 

“community development financial institutions” rather 

than financial institutions more broadly.7

 The preferred 

stock purchased by the Treasury under the CDCI 

requires only a 2 percent dividend for the first eight years, 

compared with 5 percent for the first five years under the 

CPP. After that initial period, the CDCI requires dividend payments at a rate of 9 percent, as does the CPP. 

CBO estimates a subsidy rate for the CDCI of 27 percent; with investments of $570 million, the net cost to 

the government is projected to be about $150 million. 

Assistance to American International Group. AIG initially received financial assistance in two forms through 

the TARP: The Treasury purchased $40 billion in preferred stock from AIG and established a $30 billion line 

of credit for the company.8

 The Treasury subsequently 

received another $8 billion in preferred stock in exchange 

for providing $8 billion to AIG pursuant to that line of 

credit. On January 14, 2011, AIG restructured its obligations under the TARP. As part of that restructuring, the 

Treasury agreed to exchange its existing preferred stock—

with a total value of $48 billion—for approximately 

1.1 billion shares of AIG common stock. In addition, 

AIG drew down over $20 billion from the balance on its 

line of credit to purchase preferred shares in former AIG 

subsidiaries from the Federal Reserve Bank of New York. 

As of March 3, AIG had $2 billion still available on its 

line of credit and had repaid the Treasury $2 billion from 

the partial sale of those newly acquired shares in former 

subsidiaries.9

 On the basis of current market prices for 

shares of common stock in AIG (adjusted to reflect the 

effect on the stock price of the perceived possibility of 

additional federal assistance), CBO estimates a subsidy 

cost of $14 billion to the Treasury for the assistance to 

AIG. 

Financial Assistance to the Automotive Industry

General Motors (GM) and Chrysler, along with their 

associated financing intermediaries, received just over 

$79 billion in TARP funds. In addition, the federal government offered to guarantee $5 billion in loans to parts 

manufacturers for GM and Chrysler; only $413 million 

of such loans was actually disbursed, however, bringing 

the total assistance to the automotive industry to about 

$80 billion.10 The total subsidy cost for assistance to the 

automotive industry is expected to be $14 billion, in 

CBO’s estimation.

Following the bankruptcy proceedings of GM and 

Chrysler, the Treasury agreed to exchange the debt positions it held in the original companies for a blend of debt, 

equity, and preferred shares in the newly configured companies—“New GM” and “New Chrysler”—that emerged 

after bankruptcy. Since that time, the companies have 

repurchased roughly $11 billion in debt. The Treasury 

holds about 33 percent of New GM’s equity following 

the sale of more than 400 million shares as part of the 

company’s initial public offering; that sale generated 

$13.5 billion in gross proceeds for the Treasury. The 

Treasury also retains $1 billion in debt obligations of 

6. Bank of America paid the Treasury $276 million in connection 

with terminating the asset guarantee plan. See Department of the 

Treasury, “Treasury, Federal Reserve and the FDIC Provide Assistance to Bank of America” (press release, HP-1356, January 16, 

2009), and “Summary of Terms: Eligible Asset Guarantee” (press 

release, January 15, 2009).

7. An eligible “community development financial institution” must 

be a bank, thrift, or credit union certified by the Treasury as 

targeting more than 60 percent of its small business lending 

and other economic development activities toward underserved 

communities.

8. The maximum amount that could be borrowed under the line of 

credit was $30 billion minus $165 million for retention bonus 

payments made to employees of AIG Financial Products Corp. 

and AIG Trading Group, Inc., in March 2009.

9. On March 8, 2011, AIG repaid an additional $7 billion, bringing 

the total repayment to $9 billion. That additional repayment does 

not substantially affect CBO’s estimate of the subsidy provided to 

AIG.

10. The support program for parts manufacturers ended in April 

2010, yielding a small net gain to the Treasury.
6 REPORT ON THE TROUBLED ASSET RELIEF PROGRAM—MARCH 2011

CBO

“Old GM,” which remains in bankruptcy as Motors 

Liquidation Corporation. The Treasury’s investment in 

New Chrysler consists of a line of credit amounting to 

$7 billion—including $2 billion in funds available but 

undrawn (the bulk of which CBO expects will be used)—

and ownership of 9.9 percent of the company’s equity. 

On March 2, 2011, the Treasury sold nearly $3 billion of 

preferred shares of Ally Financial (formerly GMAC); the 

remaining $15 billion investment in that company consists of $6 billion in preferred stock and ownership of 

73.8 percent of the company’s equity.11

Investment Partnerships

To encourage private investment in certain financial 

assets, the Treasury created public–private partnerships 

for investment in specific sectors. Those initiatives will 

cost the federal government a total of about $500 million, CBO estimates.

Term Asset-Backed Securities Loan Facility. The Treasury 

initially committed $20 billion to cover potential losses 

of the Federal Reserve’s Term Asset-Backed Securities 

Loan Facility (TALF), which provided financing to investors who bought highly rated securities backed by assets 

such as automobile loans, credit card loans, student loans, 

and business loans guaranteed by the Small Business 

Administration. Because the TALF is closed to new loans 

and the Federal Reserve provided less financing than originally anticipated, the Treasury has reduced its commitment to $4 billion, for which CBO estimates a net subsidy cost to the Treasury of about $250 million.

Public–Private Investment Program. Through the 

Public–Private Investment Program, the Treasury agreed 

to provide “nonrecourse” debt and to match privatesector equity in Public–Private Investment Funds 

(PPIFs), which purchase illiquid assets from financial 

institutions.12 In July 2010, the Treasury reduced the 

total amount available to the PPIFs from $30 billion to 

$22 billion. Those partnerships each have three years 

to draw on TARP funds, and they are scheduled to end 

eight years from their initiation dates but may be 

extended for up to two more years.

Through March 3, the Treasury had disbursed a total of 

$16 billion through this program. More than $5 billion 

of that amount was used to purchase equity capital in the 

PPIFs, which was fully matched by private-sector investments, and roughly $11 billion was for loans. CBO 

expects that the Treasury will ultimately disburse the 

entire $22 billion made available to the program, with a 

subsidy cost of roughly $250 million.

Securities Guaranteed by the Small Business 

Administration. The Treasury also developed a program 

to purchase up to $1 billion in securities guaranteed by 

the Small Business Administration. As of October 3, 

2010, when the TARP’s authority to make new purchases 

in existing programs expired, the Treasury had purchased 

$0.4 billion of those securities. CBO estimates a low subsidy rate and a small cost for this program.

Mortgage Programs

The federal government initially committed a total of 

$75 billion for the Home Affordable Modification 

Program, which was intended to provide direct payments 

to mortgage servicers to allow them to help homeowners 

avoid foreclosure. Of that total, $50 billion was made 

available through the TARP, and the remaining $25 billion was to be provided through Fannie Mae and Freddie 

Mac. Through the end of February, roughly 600,000 

homeowners had received permanent modifications to 

their mortgages through the program. In addition, the 

Treasury has committed roughly $8 billion of the program’s funding for grants to selected state housing finance 

agencies and another $8 billion for programs of the 

Federal Housing Administration.13 Total disbursements 

for mortgage programs were about $1.2 billion through 

the end of February, but CBO anticipates that the TARP 

ultimately will disburse a total of $13 billion for those 

programs. Because most payments provided through 

those programs are direct grants and require no repayments, the government’s cost is generally equal to the full 

amount of the disbursements (that is, the program has a 

100 percent subsidy).

11. Ally Financial and New and Old Chrysler are private companies 

and thus do not have publicly traded shares. 

12. “Nonrecourse” debt refers to a loan that is secured by specifically 

pledged collateral; that is, if the borrower defaults, the lender has 

claim only to that collateral and not to any other assets of the borrower. That debt constituted 50 percent of the total funding.

13. The Hardest Hit Fund provides money to housing finance 

agencies in states identified by the Treasury as facing the most 

severe declines in home prices and employment rates. The Federal 

Housing Administration’s Short Refinance program makes 

incentive payments to lenders for refinancing existing loans to 

borrowers who have negative home equity.
REPORT ON THE TROUBLED ASSET RELIEF PROGRAM—MARCH 2011 7

CBO

Comparison of CBO’s and OMB’s 

Estimates 

Although OMB used an approach similar to CBO’s to 

value the TARP’s asset purchases and guarantees, its 

most recent estimate of the program’s total cost was 

$45 billion higher than CBO’s current estimate (see 

Table 3 on page 4). That difference stems principally 

from three factors:

 OMB estimated that $46 billion will be disbursed 

through the Treasury’s mortgage programs; CBO 

anticipates that only $13 billion will be spent. The 

difference between those two estimates results 

primarily from the disparate outlooks on the number 

of eligible households and their likely participation 

rate.

 CBO derived its market-based valuations from information available through March 3, 2011, whereas 

OMB used data as of December 31, 2010. Because 

both agencies estimate subsidy costs using market 

prices, fluctuations in prices and the timing of repurchases lead to different estimates of the costs. Since 

the date of OMB’s analysis, market prices for shares 

of financial institutions generally have increased, 

which has raised the estimated value of the Treasury’s 

outstanding investments (particularly those made 

through the CPP), in turn lowering the estimated net 

cost of the TARP. 

 CBO’s assessment of the cost of assistance to the 

automotive industry is lower than that of OMB; 

fluctuations in market prices and additional repayments of principal occurring after OMB completed its 

analysis contributed to the difference. 

Changes from CBO’s November 

Estimates

In its Report on the Troubled Asset Relief Program—November 2010, CBO reported a projected cost of $25 billion 

for the TARP over its lifetime. Since the publication of 

that report, the estimated cost has fallen by $6 billion, to 

$19 billion, primarily as a result of a decline in the estimated cost of assistance to the automotive industry. 

CBO’s estimate of the cost of that assistance has dropped 

from $19 billion to $14 billion because the financial status of the companies continues to strengthen, thereby 

leading to an increase in the estimated value of the Treasury’s investments. A number of other factors accounted 

for an additional $2 billion reduction in the projected 

cost. CBO also raised its estimate of the total expected 

expenditures for the Treasury’s mortgage initiatives from 

$12 billion to $13 billion, primarily because of an 

increase in the projected average cost per modified loan.