The White House said Thursday the cost of the 700-billion-dollar bank bailout launched at the height of the financial crisis was much lower than expected, at under 50 billion dollars.
Treasury Secretary Timothy Geithner informed President Barack Obama of the revised figure during his daily economic briefing, White House spokesman Robert Gibbs said.
The Troubled Asset Relief Program (TARP) was introduced by the former Bush administration in 2008 and continued by the Obama administration, amid dire warnings the financial system was on the verge of collapse.
The program is intensely unpopular in America, and many conservative candidates running in November’s mid-term elections have a “no more bailouts” platform, despite the program’s apparent success and lower than expected cost.
The non-partisan Congressional Budget Office had previously estimated in its latest accounting of the program that it would cost 66 billion dollars.
“I think right now, the briefing that the President got had that number at under 50 billion dollars,” said Gibbs, adding that the figure would improve as the rescued auto sector pays back its loans under the program.
The scheme was introduced to buy up toxic assets from banks and other financial institutions at a time when the financial system was on the verge of collapse.
But the funds made available to the Treasury Department turned out to be used, especially in repeated bailouts of banks and carmakers.
Banks that benefited from TARP funds were required to pay back the taxpayer investment in order to write off the stake the government took in their stock.
In addition, they had to regularly pay high dividends to the Treasury for as long as they owed funds to the government.