March 4, 2010 – Recent updates to the TARP subsidy estimates indicate that the previously projected cost of the program to the government for fiscal year 2009 has decreased to $152 billion. This is a significant reduction to the Congressional Budget Office (CBO) estimate from March 2009, when the long-term costs were expected to be $356 billion. That estimate represented a significant increase from CBO’s previous January 2009 estimate that the program would cost $189 for the FY 2009–2010 period.

Further, January 2010 CBO estimates show that the program will bring in revenue for FY 2010, and then cost the government an additional $16 billion from FY 2011–2020. Pew Economic Policy Group’s Doug Hamilton was quoted in a recent article discussing TARP estimates, in which he confirmed that the projections of TARP’s lifetime costs “are a lot lower than they were last year, mostly because the stock market values have improved so much.”

While TARP cost estimates have decreased considerably, CBO’s recent projections indicate that Fannie Mae and Freddie Mac will impose relatively large costs on the Treasury; the latest estimate for the costs of Fannie and Freddie total $176 billion for FY 2009-2020. Subsidyscope will be updating these and other bailout related information on its Web site soon.