Today CBO released the second of our statutory reports on transactions undertaken as part of the Troubled Asset Relief Program (TARP). The assessment discusses the costs of purchases and guarantees of troubled assets taken to date, as well as the information and valuation methods used to calculate those costs.
The TARPs transactions through June 17, 2009, included net disbursements, guarantee agreements, and loans totaling $369 billion. Valuing the assets using procedures similar to those specified in the Federal Credit Reform Act, but adjusting for market risk as specified in the Emergency Economic Stabilization Act, CBO estimates that the subsidy cost of the transactions (broadly speaking, the difference between what the Treasury paid for the investments or lent to the businesses and the market value of those transactions, including repayments) amounts to $159 billion.
Currently, the Secretary of the Treasury has the authority to purchase and hold up to roughly $699 billion in assets at one time. Of the $329 billion in authority remaining for the TARP, $142 billion has yet to be allocated to any of the existing or pending activities announced by the Treasury.