TARP Watchdog: Bailouts May Cost US $24T

Number based on 'hypothetical maximum,' Treasury counters
By Harry Kimball,  Newser Staff
Posted Jul 20, 2009 3:41 PM CDT
Federal Deposit Insurance Corporation (FDIC) Chair Sheila Bair looks on at right as Treasury Secretary Timothy Geithner speaks.   (AP Photo)
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(Newser) – The special inspector overseeing Treasury’s TARP program says federal assistance to banks and other financial entities could end up costing taxpayers $23.7 trillion, Bloomberg reports. Aside from the $700 billion bailout, Neil Barofsky says in testimony prepared for told Congress tomorrow, other trillion-dollar federal programs could balloon. “TARP has evolved into a program of unprecedented scope, scale and complexity,” Barofsky says.

The Treasury Department strenuously objects to Barofsky’s estimates, and says the US has spent less than $2 trillion to help troubled financial institutions. “These estimates of potential exposures do not provide a useful framework for evaluating the potential cost,” a spokesman says. “This estimate includes programs at their hypothetical maximum size, and it was never likely that the programs would be maxed out at the same time.”