President Barack Obama said on Thursday that “we got back every dime we used to rescue the financial system.”
According to the Congressional Budget Office, however, the government will lose about $24 billion on the bailout.
“We got back every dime we used to rescue the financial system, but we also passed a historic law to end taxpayer-funded Wall Street bailouts for good,” Obama said in Miami Thursday.
The Congressional Budget Office–based on figures from Obama’s own Office of Management and Budget—gives a different assessment.
“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 yet been made, will amount to $24 billion,” said the CBO report, which was released on the same day Obama spoke.
TARP is the Troubled Asset Relief Program – the formal name of the government’s financial bailout program passed in October 2008.
CBO said that the cost of TARP “stems largely from assistance to American International Group (AIG), aid to the automotive industry, and grant programs aimed at avoiding home mortgage foreclosures,” noting that the losses will be so large they will eclipse the financial gains the government will realize from bailing out other large financial institutions.
In fact, CBO reported that as of now $65 billion in TARP funds remain outstanding.
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