By Silla Brush - 10/05/10 06:24 PM EDT
The Treasury Department said Tuesday that the bailout of banks, auto companies and large financial firms will cost taxpayers $30 billion, once it sells off its stake in American International Group (AIG).
The bailout began under President George W. Bush and was continued by the Obama administration to help stabilize the financial system and avert a second depression.
Congress initially passed legislation granting the government $700 billion to support the economy through the Troubled Asset Relief Program (TARP).
The program ended officially last Sunday, and the government is in the process of ending existing programs to support banks, General Motors, AIG and the housing market.
The department said the costs of TARP specifically would be about $50 billion.
That sum does not include Treasury's additional stake in common stock
of American International Group (AIG), the insurer that required
federal aid to fulfill its commitments to counterparties in the
The department estimated taxpayers would receive an additional 563 million shares of AIG common stock, which has a current value of about $22 billion. Other investments in AIG will cost taxpayers $5 billion.
The department estimated the profit on the AIG stock would reduce the $50 billion cost of TARP to about $30 billion.
Treasury also estimated today that programs to support the automotive industry would cost $17 billion and efforts to support the housing market would cost $46 billion. Treasury estimated taxpayers would make $16 billion on its investments in banks.
The Obama administration and Treasury Secretary Timothy Geithner have recently praised TARP, which remains unpopular with voters and has been a major issue in the midterm elections.
Geithner said in a statement Tuesday that he hoped the public would "reassess" TARP's impact.
"TARP undoubtedly helped to stem the financial panic in the fall of 2008 and contributed to the stabilization of the financial system," Geithner said.