NEW YORK (CNNMoney.com) -- The cost of the government's controversial bailout of the financial system could amount to less than a third of what the Obama administration originally expected, Treasury Secretary Timothy Geithner said in a letter to Congress Friday.
"A year ago we estimated that our support for the financial system could cost more than $500 billion or 3.5% of GDP," Geithner wrote in the letter. "We now expect that the direct costs of all our interventions will cost less than 1% of GDP."
Citing the White House's Fiscal 2011 budget, Geithner estimated losses from the Troubled Asset Relief Program (TARP) at $117 billion.
The Congressional Budget Office in March estimated the loss from TARP would be $109 billion.
Not included in those estimates are potential losses from the government support of Fannie Mae and Freddie Mac, government enterprises that support home loans.
Geithner's letter updates Congress on the status of the government's bailout program as the Senate prepares to vote Monday on whether or not to work on the hotly debated Wall Street reform bill. 
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