Counting to $700 billion

Treasury confirms its accounting of the $700 billion bailout, after much debate and scrutiny about how much was left in the fund.

EMAIL  |   PRINT  |   SHARE  |   RSS
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all RSS FEEDS (close)
By David Goldman, staff writer


NEW YORK ( -- 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, 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." To top of page

They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
More Galleries
17 cool gadgets that tease the future Smart telescopes, surveillance for dogs, an electric roadster and more from CES 2018. More
These 12 airplane beds let you really sleep on a flight For the price of a premium class ticket, you may just get a space that's comfortable, private, and quiet enough to ensure a good rest. More
CES 2018 kicks off with oddball gadgets The biggest tech show of the year opened with a collection of quirky gadgets. More
Worry about the hackers you don't know 
Crime syndicates and government organizations pose a much greater cyber threat than renegade hacker groups like Anonymous. Play
GE CEO: Bringing jobs back to the U.S. 
Jeff Immelt says the U.S. is a cost competitive market for advanced manufacturing and that GE is bringing jobs back from Mexico. Play
Hamster wheel and wedgie-powered transit 
Red Bull Creation challenges hackers and engineers to invent new modes of transportation. Play