Sunday, January 29, 2012

Watchdog: $133 billion in TARP funding still hasn’t been repaid

By Peter Schroeder 01/26/12 10:16 AM ET
American taxpayers still have $132.9 billion in funds tied up in federal bailout programs, and they will not recoup all of that investment, according to a new watchdog report.
The Special Inspector General for the Troubled Asset Relief Program (SIGTARP) told lawmakers in its quarterly report that the Treasury has already lost $12 billion on the broad bailout program, with more losses potentially to come.
Taxpayers will never get back some of these funds, SIGTARP stated in its report.
In addition, while the government has been winding down its involvement in the program, the watchdog noted that some aspects of the program will linger for years.
The new report provides a stark reminder of the challenges facing TARP, even as the Treasury Department has been eager to tout the successes of the often-reviled initiative.
The report noted that some programs under TARP, mainly targeted at housing, were never intended to be paid back — the Treasury has the ability to dole out $51 billion more in that effort through 2017.
The watchdog also noted that, even as the Treasury is trying to exit some investments in firms such as American International Group (AIG) and General Motors, the slow economic recovery and volatile financial markets have posed challenges. The Treasury estimated it needs to sell its 1.5 billion shares of AIG stock at $28.73 per share to break even, and its 500 million shares in GM at $53.98 per share. -Read Full Article

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