Posted on 02 Feb 2010
The Treasury Department now expects to use less money from the Troubled Asset Relief Program than the maximum it projected when the rescue effort was extended late last year.
The Obama administration's fiscal year 2011 budget proposal suggests total obligations under TARP will reach $546.4 billion. That figure is $230.3 billion less than projected in the president's midsession budget review in August and $13.6 billion less than the maximum Treasury Secretary Timothy Geithner said would be disbursed under the extended program.
Mr. Geithner in December authorized TARP to be extended through October 2010. As part of that announcement, he said he estimated no more than $560 billion in total TARP disbursements.
The Obama administration's budget proposal continues to expect TARP to add $116.8 billion to the U.S. deficit, down from $340.9 billion projected in the midsession review. The government attributes the lower-than-expected cost to better market conditions and fewer-than-expected purchases under the program.
The Obama administration's budget proposal, released Monday, suggests that American International Group will receive $69.8 billion from TARP through 2010. The Treasury already has provided AIG with $43.2 billion from TARP.
The proposal forecasts that aid to the housing sector could reach $48.8 billion, up from the $27 billion already committed to foreclosure-prevention efforts.
Meanwhile, the budget plan would increase by four times the funding for the office administering TARP. The administration projects spending on the Office of Financial Stability will reach $443 million in 2010 before falling to $309 million in 2011. The budget for the office stood at $90 million in 2009.