Eye on the Bailout

April 10: This post has been corrected.

There's a lot to be mad at AIG about: the retention bonuses to executives, the secretive payments to banks and other counterparties, the risk-taking that nearly sank the company in the first place.

But shouldn't we relax? After all, isn't AIG going to pay it all back in the end?

That's the $180 billion question. AIG once said with certainty that the payback was no problem. Now, the company is hedging.

"We remain reasonably confident that we can repay what we have borrowed from the government," AIG spokeswoman Christina Pretto told ProPublica.

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Since AIG's bailout, the company has forked over $52 billion to Goldman Sachs, Deutsche Bank and others who bought credit default swaps. The payments have raised a chorus of disapproval, with many arguing that AIG's new owners -- that'd be taxpayers -- shouldn't be paying out the full contracts.

Treasury Secretary Timothy Geithner has countered that the government's hands were tied and AIG had no choice but to pay out the full value of the swaps, which are complicated financial bets that often function like insurance but can also be more like a bet with a Vegas bookie.

"We came into this crisis as a country without the tools necessary to contain the damage of a financial crisis like this," Geithner told George Stephanopoulos on ABC's "This Week." The government, he said, "had no meaningful ability to come in [and] change contracts where necessary."

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It’s not easy figuring out just how much remains uncommitted of the $700 billion bailout, and Treasury’s new Web site isn’t much help. After Dow Jones reported last weekend that Treasury was refusing to say how much was left in the bailout coffers, Treasury finally gave an answer: $134.5 billion. It was a number higher than expected, or rather, higher than one would get by simply adding up the commitments Treasury officials had made for various programs.

We got a Treasury spokesman to walk us through their addition, and here’s how it goes. Keep in mind these numbers show how much money Treasury has set aside for these purposes, not how much is actually out the door. (Our ongoing tally of that shows $303.3 billion actually spent.)

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As promised, the Treasury Department rolled out a brand new Web site this week: FinancialStability.gov is supposed to be the citizen’s guide to the $700 billion bailout (although the word “bailout” doesn’t actually appear anywhere on the site). It’s a marked improvement over the old site, which was not much more than a hastily assembled jumble of links.

First, the bad news: If you were looking for a clear breakdown of how many taxpayer dollars Treasury has committed so far, you won’t find it there. You can only arrive at such a total with some painstaking addition (which we’ll break down in a subsequent post). Providing that ongoing tally is a resource we hope to provide with a new, revitalized version of our list of bailout recipients coming soon.

There is good news. Treasury has followed through on its promise to post the contract for each investment. You can finally get Treasury’s list of its investments in a format other than a PDF file – and those wanting a downloadable spreadsheet can get it here.

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