Counting to $700 billion

ROAD TO RESCUE

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NEW YORK (CNNMoney.com) -- The mystery is solved: The Treasury Department has clarified its accounting of the $700 billion allocated for the financial-sector bailout, known as the Troubled Asset Relief Program, or TARP.

Assessing how much has been spent -- and how much is left for emergencies -- hasn't been easy. Some of the numbers are straightforward; some are based on estimates of how certain bailout programs will play out.

Last Wednesday, Treasury Secretary Tim Geithner would speak only in general terms: "Very, very reasonable amounts of money -- significant enough money," Geithner said in a public appearance in New York.

Then on Sunday, Geithner got more specific, saying on ABC's "This Week" that there was "roughly $135 billion left of uncommitted resources."

Turns out it's $134.5 billion, and $565.5 billion is spoken for.

In response to questions from CNNMoney.com, a Treasury spokesman has offered more specifics on how Treasury arrived at that number.

For instance, Treasury originally said it would spend $250 billion on investments in banks. But with heightened scrutiny over bailed-out companies, fewer banks have been applying for TARP funds lately. Some banks have even expressed interest in returning those funds back to the government. As a result, Treasury has lowered to $218 billion its estimate for funding the bank investment program.

Similarly, Treasury had initially estimated that it could lose $100 billion on its TALF program, an initiative to boost consumer loans. It has reduced that estimate to $35 billion, citing investor "demand for assets."

Finally, Geithner on Sunday for the first time gave an estimate of how much the Treasury expects to get back from banks, saying that $25 billion represented "a very conservative judgment about how much money is likely to come back from banks that are strong enough not to need this capital now to get through a recession."

Why does it even matter how much is left?

The government's rescue programs are still incomplete, and the amount of money that Treasury has to work with is crucial. For instance, Treasury on Monday, as part of its automaker bailout, said it would allocate an unspecified amount from TARP to a vehicle warrantee guarantee program.

If Treasury needs more money for TARP, Geithner would have to ask Congress for additional funding. He told the Senate Budget Committee on Feb. 11 that a request for more money -- if needed -- will be done "with as much care and consultation and design as possible."

President Obama, in his budget proposal in February, put $250 billion as a "placeholder" for net costs of additional funds needed to stabilize the financial system.

"The reality is that Treasury doesn't have enough money left to give to banks if they need it," said Dan Clifton, head of policy research at Strategas Research Partners. "They're going to have to go to Congress for more money."

Despite some sentiment that the Treasury's coordinated rescue effort will help the economy and financial markets rebound, policy experts believe that Geithner would face a difficult challenge if he asks for more money. Last month, he was blamed by some lawmakers for failing to react swiftly enough to bonuses paid out by bailed out insurer AIG.

"If they had a real substantive emergency that was evident, Treasury could get an emergency appropriation form Congress," Clifton said. "But [otherwise], they're not going to get the votes."