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The Bailout Yearbook: The Stars and the Slackers

With the bailout set to expire this weekend, here are the recipients that have shined -- and here are the ones that have flopped.

After two years and half a trillion dollars, the federal bailout fund is set to expire Oct. 3. After that, the government won't be able to start new programs through the bailout, though it can continue paying money that's already committed.

We've been following every dollar via our Bailout Tracker. But with the end now in sight, we've decided it's time to get a bit nostalgic, take a step back and look at the bailout's recipients and programs that have shined -- and those that have flopped.

First, a Quick Bailout Refresher

In the fall of 2008 as the economy tumbled precipitously, Congress authorized the Treasury Department to spend $700 billion in a financial rescue plan called the Troubled Asset Relief Program. (TARP's spending cap shrank this summer to $475 billion as a result of financial reform.) TARP's largest programs included capital injections into banks, loans to the auto industry, direct support to AIG and the government's foreclosure relief efforts, mainly the mortgage modification program. Shortly after TARP, Congress passed a separate housing bill that authorized the rescue of the quasi-governmental housing giants Fannie Mae and Freddie Mac.

We've been tracking the aid for every recipient -- from local banks to General Motors. By our count, the Treasury has doled out more than $548 billion. Almost half of that -- $238 billion -- has been repaid to the government via interest, dividends, fees or repurchased stock warrants.

Some parts of TARP may be profitable as the government earns money from investments in financial institutions, but over all the program is expected to end up in the red. Because more than half of the funds are still outstanding, the total expense for the bailout remains up for debate. Cost estimates for TARP range from $66 billion (from the Congressional Budget Office) to $127 billion (from the president's Office of Management and Budget).

Now, on to the superlatives. Drumroll, please ...

Most Profitable TARP Bank Investment: Bank of America

Taxpayers have earned nearly $4.6 billion from the bailout of Bank of America, which received and fully repaid $45 billion in TARP funds. Citigroup took the same amount but has paid back only $20 billion. The rest was converted to common stock, which Treasury has been selling off.

Most Expensive Couple: Fannie Mae and Freddie Mac

The costs of TARP will likely be dwarfed by the expense of bailing out the two government-sponsored enterprises that guarantee mortgages, according to the Congressional Budget Office.

In September 2008 in an attempt to stabilize the housing market, the Treasury put Fannie Mae and Freddie Mac under conservatorship, assuming the costs of owning and guaranteeing the mortgages in their portfolio. Since then, the government has dispersed $85 billion to Fannie Mae and $63 billion to Freddie Mac to cover their losses.

Technically the government's investment in the GSEs has no funding cap. The CBO estimates the expense will reach $389 billion over 10 years.

Most Maligned Program: Capital Purchase Program

Public anger has targeted TARP's Capital Purchase Program, which bailed out more than 700 banks. That program, however, will likely be one of the most profitable parts of TARP. To bolster bank balance sheets, Treasury provided capital by buying shares of the banks. As banks pay out dividends, repurchase warrants and repay their loans, the government makes money. Though some banks are struggling to meet their obligations, the program overall should end up making a profit -- but just how much money it will make remains open to debate. Taxpayers are currently $47 billion in the hole on the program, according to the latest TARP report to Congress. Treasury says taxpayers will eventually make $9.8 billion, while the Congressional Budget Office says the program will make $2 billion.

Tardiest Bank: Saigon National Bank

California's Saigon National Bank holds the record for latest dividend payments of its bailout funds, missing seven consecutive quarterly payments -- that's every single payment. Saigon took $1.5 million in government funds, making it one of the smaller players in the Capital Purchase Program, the part of TARP that directly propped up "healthy" banks.

More than 120 banks missed their most recent quarterly payment. Most of those banks were small, like Saigon National.

Priciest Hot Rod: General Motors

The government spent nearly $50 billion to bail out General Motors, primarily to help the auto company restructure under bankruptcy protection. The government now owns 61 percent of the new, post-bankruptcy GM. The company has repaid $7 billion, but to recoup the remaining $43 billion, the government would have to sell GM stock at an average of $133.78 a share, according to the special inspector general for TARP. That's almost $40 a share more than the "old" GM's high, The Wall Street Journal reported. The sales will likely take place over several years and multiple stock offerings, the first of which will be this November.

The Congressional Oversight Panel also slammed the Treasury Department for missing opportunities "to increase accountability and better protect taxpayers" in the rescue of GMAC, the financing arm of GM.

Biggest Underachiever: Making Home Affordable

The Treasury Department set up its marquee foreclosures relief program, Making Home Affordable, as a pay-for-performance model. Under a complicated system of incentive payments, the government spends money only when mortgage servicers permanently modify mortgages. Since there have been few of those, the government has not spent much on the program. Making Home Affordable's maximum allocation is $30.6 billion, but so far less than half a billion has been paid out.

As we recently noted, if the program keeps up its current rate, it will help several hundred thousand fewer homeowners than even the Treasury's modest goals.

Biggest TARP Black Hole: AIG

No company has received more direct support than the insurance giant AIG, which had vast exposure to the problems in the housing market. By the end of 2009, AIG's outstanding balance was $47 billion from the Treasury Department and $81 billion from the New York Fed, according to the CBO.

AIG has not repaid any of the investment nor has it doled out any dividends, but an end may be in sight. Today's news confirmed other recent reports: that AIG has reached an agreement with the government to repay bailout funds, but it must first pay back the Fed before settling up with Treasury, which currently owns 80 percent of the company. Under the repayment arrangement, Treasury will own more than 90 percent of AIG and will sell off those shares over time.

Listen to ProPublica reporters Paul Kiel and Karen Weise discuss the successes and failures of the bailout in the ProPublica podcast.

Karen Weise

Karen Weise was an intern at ProPublica and a recipient of the Mark Felt Scholarship for Investigative Reporting at UC Berkeley's Graduate School of Journalism.

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