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Behind Administration Spin: Bailout Still $123 Billion in the Red

The administration has been on a charm offensive about the TARP. We check in with our bailout database to show where things really stand.

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A news ticker in New York's Times Square on Oct. 14, 2008, after it was announced that some of the $700 billion bailout would be used to buy stakes in banks. (Stan Honda/AFP/Getty Images)

The administration has been on a PR offensive in recent months to tell the good news about the TARP. As the Treasury Department official in charge of the TARP is saying at a congressional hearing this morning, the bailout won't cost anywhere near the full $700 billion Congress authorized. In fact, many of its investments have turned a profit, and some of its most infamous bailouts -- such as the rescue of AIG -- won't end up being the tax dollar black holes they once seemed sure to be.

But the true picture isn't so rosy.

At ProPublica, we've provided a comprehensive bailout database since TARP's launch. It shows not only how much money has gone to each recipient, but how much each has paid in interest and dividend payments. With all this data, we're able to clearly show how deep in the hole the program remains. And the answer as of today is $123 billion.

Add that to the bailout of Fannie Mae and Freddie Mac -- which our site also tracks and is separate from the TARP -- and taxpayers are $257 billion in the hole.

Although the bailout has extended to nearly a thousand institutions, just a few are primarily responsible for the continued deficit: Fannie and Freddie, of course, AIG, and the auto companies (GM, Chrysler, GMAC).

As for Fannie and Freddie, no solution seems imminent. They're currently $134 billion in the red (counting their dividend payments) -- more than the entire TARP. Congress and the administration are in the initial stages of discussing how the companies should be wound down and how much of the investment could be recouped.

AIG is a different story. It has started repaying the taxpayers' investments. So far, about $9 billion has come back, leaving the amount outstanding at $58.7 billion. The government holds a 92.1 percent stake in the company, which will be sold off over time. The process could take anywhere between six months and two years, Treasury officials told the Congressional Oversight Panel, and there's a strong possibility that the government could recoup its entire investment.

The country's largest banks (Bank of America, Citigroup, JPMorgan Chase and Wells Fargo) have also all paid back their TARP investments with a profit for the government.

But the government's rescue of the auto industry (specifically, GM, Chrysler, and GMAC) almost certainly won't ever make its way out of the red. As of today, the hole is $47 billion.

How much will the TARP end up costing when everything's said and done? The short answer is that it's anyone's guess. The Congressional Budget Office put the toll at about $25 billion in November. Part of the reason the projected cost is so low is actually the poor performance of the administration's foreclosure prevention programs, which seem likely to spend far less than the $50 billion initially set aside for them.

Hundreds of smaller banks also haven't paid the money back, and many are struggling. According to SNL Financial, 154 banks that received TARP money are delinquent on dividend payments to the government. That's about 22 percent of the 707 banks that received money through the TARP, but because the banks are generally quite small, the government's total investment in all these struggling banks only amounts to about $3.9 billion. So far, six banks that received TARP funds have failed, and one more, CIT, went bankrupt, according to research from Keefe, Bruyette and Woods.

We update our bailout database regularly -- so check back to see the progress.

Barry Schmittou

March 17, 2011, 2:39 p.m.

To see more Obama dangerous spin including how Obama will not prosecute insurance company doctors’ who ignore brain lesions, Multiple Sclerosis, cancer, cardiac conditions and more, and how non prosecution agreements have been given to two insurance companies who are major campaign contributors please go to http://www.obamaknowsdoctorscrimesendangerlives.blogspot.com

To see how identical crimes are being committed by multiple insurance companies in five different types of insurance please go to http://www.5typesofdeadlyinsurancecompanycrimes.blogspot.com

(Bullet point one of the 5 Types website refers to the evidence linked in the first paragraph above)

The point is, the government did what it’s supposed to do, stepping in with its clout to save the economy, including U.S. auto companies whose failure would have been catastrophic for millions of people and for the nation as a whole. Whether it recoups all of the money or not, TARP was a huge success. What’s it worth to avoid a depression?

I understand that TARP was intended to stabilize an economy that was headed off the cliff in a hurry.  I just wish this administration was as concerned for the families and people still falling off.  The financial sector is important, but more important than the people?  I don’t think so.

Not sure what your issue or point is. TARP was started under the Bush Admin w/no accountability.  If not for the Obama Admin we would be 700 billion in the hole.  To be down 125 billion after such a short period of time is quite a success.  No one likes the bailout to dishonest Wall Street banks, but this article tastes like sour grapes to me.

This still doesn’t take into account the TRILLIONS the Fed gave the big banksters.

David Bumke - the Goldman boys gambled with your money, and mine. The casino bosses made sure their boys will be in charge of our treasure for years to come.  They create and implement policy and every president since the 80’s first wave of deregulation is beholden to them .  These boys include Greenspan (the only one who has confessed to have been wrong) Ruben, Paulson, Larry Summers, Geithner (who did not pay the six-figure taxes owed on the fortune he made along everyone else in the Goldman’s casino) and others less heard of.  They learned from the early times JP Morgan, by the creation of derivatives, how to package and sell the credit default swaps that made them billions (millions were just the bonus paid to the employees.)  The gambling winnings came from bets on the losses caused by the of sub-prime mortgage casualties produced by defaults that got out of control.  Goldman Sucks demanded their bets winnings from AIG and that is when it hit the fan.

Now, these investors did not pay taxes on those billions earned because they are this nation’s capitalists and they do not have to.  And that is OK because this is an unregulated capitalist society.  Now then - when the house of cards collapsed, these capitalists decided that socialism was not just OK, it was essential; and therefore, those of us who DO pay taxes had to have our tax money go to AIG’s billfold to pay the gamblers, though we had no say on it.  In other words, to design a system to siphon the wealth of a very rich nation and not pay taxes is capitalism.  To lose it all and have a socialist method baptized TARP to reimburse them is all creative and therefore, all those creative minds got never before seen bonus compensation.  The casino people knew what they had sold, just as they knew they could not lose on the bets.  The problem is that AIG had also become creative in designing MBS and CDO strategies for them to invest on, in addition to selling in large quantities (insured by them, of course)

A large portion of the TARP bail-out for the other Goldman’s wannabes, such as Fannie, Freddie, Chase, Wells Fargo, Bank of America, Citi and many others including at least two foreign banks, plus additional money given to Goldman, came from your pocket and mine, David Bumke.  You know that the subsequent loss of jobs and the destruction a substantially large portion of the middle class as a result of these “creative” investments, brought about the largest foreclosure fraud in history perpetrated by the beneficiaries of TARP to borrowers with conventional mortgages, which allowed most of these banks to report record profits in the last quarter.

David Bumke, I suppose YOU can call TARP a success

How much is averting a world wide depression like the crash of 29 worth——PRICELESS!!!

Of course the big banks were at fault, and it’s a crime that none of their leaders have been prosecuted. Giving TARP its due isn’t about supporting banks, it’s about supporting the government—including, in one of its very few less than disastrous moves, the Bush administration—for helping unfreeze credit markets. Without liquidity in the financial system, small businesses, especially, would have been unable to operate and millions more jobs would have been lost.

The government took equity/preferred stakes in financial institutions, amounting to a few percentage in aggregate, while as the same time implicit guaranteeing 100% of their much larger liabilities.  Taxpayers took 100% of the downside for a say 5% of the upside.

Without valuing the enormous value of this privately owned, and largely hidden, “put” to socialize losses, any exercise in calculating what “we made” is meaningless.

People losing their homes and jobs, small business’s including small banks failing, local governments can’t meet obligations due to fall off in tax revenue.  Big banks getting bigger, big government patting itself on the back, record profits, forgotten all about to big to fail.  No one did anything illegal, no on goes to jail. 

Sounds like a well managed government run series of programs that saved us.  By the way, don’t reply and say it could have been worse, cause we all know it could have been better too.

@ the other texan.  At that time there were only the poor immigrants from all over, though mostly Europeans.  Having the depression happened, and the wisdom of the government and the ones that followed immediately after, it gave the have-not/s (most of them residents from abroad legal or not) the inspiration to get up and make of a disaster, the largest middle class ever produced.  The awakening of that enormous crowd of sleeping minds made us a powerful, industrious nation.  Now, at a grand scale, we are a large crowd of broken spirits heading, as fast as the banks can take the homes, toward a direction to match one of the greatest third-world countries.  Once the money (money is power) is concentrated in the hands of a few, it already matches any third world nation. ——PRICELESS—-, another texan, right?  Arbusto, is that you?

The big banks have repaid their TARP accounts because the Fed has been allowing them to borrow at 0% and earn billions from inflating commodities and foreign currencies. Think food prices are simply a consumer demand issue? Foolish we are. Oh, and the easiest method of generating cash to repay TARP, just sell US Government debt back to the Fed for a profit (and taxpayer loss).

Yes this is repayment spin is pure PR smoke and mirrors. What can we do? Nothing of course, but try and get ours before the other guy does.

Oh yeah and let’s cut taxes (on the rich and corporations), that will do it! (SARCASM ALERT)

This article is part of an ongoing investigation:
Eye on the Bailout

Eye on the Bailout

As big banks return their TARP money, Fannie Mae and Freddie Mac continue to be a drain.

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