Report: Taxpayers still owed $132.9B from bailout
WASHINGTON A government watchdog says U.S. taxpayers are still owed $132.9 billion that organizations havent repaid from the financial bailout, and some of that will never ever be recovered.
The bailout launched at the height of the financial crisis in September 2008 will continue to exist for years, says a report issued Thursday by Christy Romero, the acting special inspector general for the $700 billion bailout. Some bailout programs, such as the effort to aid property owners keep away from foreclosure by minimizing mortgage payments, will last as late as 2017, costing the government an extra $51 billion or so.
The gyrating stock market has slowed the Treasury Departments efforts to sell off its stakes in 458 bailed-out companies, the report says. They consist of insurer American International Group Inc., Common Motors Co. and Ally Monetary Inc.
If Treasury plans to sell its stock in the 3 businesses at or above the price where taxpayers would break even on their investment $28.73 a share for AIG, $53.98 for GM it may possibly take a long time for the market to rebound to that level, the report says. AIGs shares closed Wednesday at $25.31, whilst GM ended at $24.92. Ally isnt publicly traded.
It will also be challenging for the government to get out of the 458 corporations as the marketplace remains volatile and banks struggle preserve afloat in the difficult economic climate, it says.
Congress authorized $700 billion for the bailout of monetary companies and automakers, and $413.4 billion was paid out. So far the government has recovered about $318 billion. The bailout is known as the Troubled Asset Relief System, or TARP.
TARP is not over, Romero mentioned in a statement. She stated her workplace will retain its commitment to defend taxpayers for the duration of the system.
Treasury spokesman Matt Anderson said the department has made substantial progress winding down TARP and has currently recovered more than 77 percent of the funds disbursed for the system, by way of repayments and other revenue.
Well continue to balance the essential targets of exiting our investments as soon as practicable and maximizing worth for taxpayers, Anderson mentioned.
The government has unwound its investments in 4 of the providers that received the most aid: Bank of America Corp., Citigroup Inc., Chrysler Group LLC and Chrysler Monetary, the automakers old lending arm.
On Wednesday, Treasury announced that it had sold the final batch of securities below its $368 million Small Small business Administration loan system below TARP.
In Romeros quarterly report to Congress, she mentioned her workplace has uncovered and prevented fraud associated to TARP. Investigations by her office have resulted in criminal charges against 10 people today and 3 convictions, the report notes.