Your Bailout Update: $315 Billion in the Red
After shrinking for several months, taxpayer exposure to the bailout jumped in February, due to Fannie Mae’s receiving another $15.3 billion.
The toll stands at $315.3 billion. That number accounts for not only the bailout money still outstanding, but also the revenue that the government has collected from recipients. Included in that revenue is $1.5 billion the Treasury Department received last week for its auction of Bank of America’s common stock warrants. Altogether, the government made a profit of about $4.6 billion through its investment in Bank of America.
Check out our frequently updated Bailout Scorecard for the complete rundown. Our comprehensive list of bailout recipients accounts both for the TARP and the separate bailout of Fannie Mae and Freddie Mac. All told, the government has lent, invested or spent about $515 billion in the bailout so far.
The Treasury has pumped a total of $75.2 billion into Fannie since the government takeover in September 2008. Together with money invested in Freddie, the total comes to $125.9 billion. Freddie has continued to take losses, but hasn’t required more government money since last May.
According to its proposed budget for 2011 (PDF) the administration expects to invest a total of $188 billion in the two companies – meaning that about $62.1 billion in bailouts are still to come. Some experts have criticized that estimate as being too low.
Meanwhile, the administration has punted on the problem of what to do with the two companies. Last year, officials said that they’d offer a broad plan this February. That plan never came. Testifying before Congress late last month, Treasury Secretary Tim Geithner said Treasury would offer some "principles and broad objectives" sometime this year, with the goal of offering a concrete proposal next year.
So expect the current state of affairs to continue for at least another year. The companies are in government conservatorship, which means that while they’re under the close watch of the Federal Housing Finance Agency, they’re still nominally separate from the government. The government keeps the companies solvent; in return, the companies say they’ve made stabilizing the housing market their priority.
As big banks return their TARP money, Fannie Mae and Freddie Mac continue to be a drain.