WASHINGTON (Reuters) - U.S. congressional budget analysts have raised their estimate of the net cost to taxpayers for the government’s financial rescue program to $356 billion, an increase of $167 billion from earlier estimates.
The Congressional Budget Office had originally projected the $700 billion Troubled Asset Relief Program would cost taxpayers $189 billion.
The additional cost, which applies to TARP spending for fiscal years 2009 and 2010, was included in the CBO’s March projection of a $1.8 trillion deficit for fiscal 2009, which ends September 30.
The TARP cost projection was raised due to changes in financial market conditions, new transactions and a shift in expected timing of payments, the CBO said.
The Treasury Department announced plans to use some of the money to help avoid home foreclosures and made new deals with Bank of America and American International Group. Those programs involved higher subsidy rates than previously estimated, the report said.
Congress passed the Wall Street bailout program in October with the goal of stabilizing banks and reassuring jittery markets.
Reporting by Lisa Richwine; Editing by Jackie Frank