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1 Report on the Troubled Asset Relief Program-April 2019 1 (April 2019)

handle is hein.congrec/rtbarp0001 and id is 1 raw text is: ~APRIL 2019 Report on the Troubled Asset Relief Program-April 2019 In October 2008, the Emergency Economic Stabilization Act of 2008 (Division A of Public Law 110-343) estab- lished the Troubled Asset Relief Program (TARP) to enable the Department of the Treasury to promote stability in financial markets through the purchase and guarantee of troubled assets.' Section 202 of that legislation, as amended, requires annual reports from the Office of Management and Budget (OMB) on the costs of the program. The law also requires the Congressional Budget Office to submit its own reports within 45 days of the issuance of OMB's report each year.2 CBO's assess- ment must discuss three elements: * The costs of purchases and guarantees of troubled assets, 1. That law defines troubled assets as (A) residential or commercial mortgages and any securities, obligations, or other instruments that are based on or related to such mortgages, that in each case was originated or issued on or before March 14, 2008, the purchase of which the Secretary determines promotes financial market stability; and (B) any other financial instrument that the Secretary, after consultation with the Chairman of the Board of Governors of the Federal Reserve System, determines the purchase of which is necessary to promote financial market stability, but only upon transmittal of such determination, in writing, to the appropriate committees of Congress (Sec. 3 of PL. 110-343, 122 Stat. 3767). 2. Originally, the law required OMB and CBO to submit semiannual reports. That provision was changed to an annual reporting requirement by PL. 112-204. OMB's most recent report on the TARP was submitted on March 18, 2019. See Office of Management and Budget, Budget of the United States Government, Fiscal Year 2020: Analytical Perspectives (March 2019), pp. 295-304, www.whitehouse.gov/omb/ analytical-perspectives. * Information CBO collects and the valuation methods it uses to calculate those costs, and * The program's effects on the federal budget deficit and debt. To fulfill that requirement, CBO has prepared this report on TARP transactions completed, outstanding, or anticipated as of February 28, 2019. By CBO's estimate, $443 billion of the $700 billion initially authorized will be disbursed through the TARP, consisting of $441 bil- lion already disbursed and $2 billion in projected future disbursements. CBO estimates that the government's total subsidy costs-including those already realized and those stemming from outstanding and anticipated transactions-will be $31 billion (see Table 1). The estimated cost of the TARP stems largely from ongoing grant programs aimed at preventing foreclosures on home mortgages, assistance to American International Group (AIG), and aid to the automotive industry. Taken together, other transactions with financial institutions have yielded a net gain to the federal government from interest, dividends, and capital gains. CBO's current assessment of the TARP's costs is $1 bil- lion lower than the $32 billion estimate it reported in March 2018.' The decrease stems from a drop in pro- jected disbursements for mortgage programs. CBO's current estimate for all TARP transactions is $1 billion lower than OMB's latest estimate of $32 billion because 3. See Congressional Budget Office, Report on the TroubledAsset Relief Program-March 2018 (March 2018), www.cbo.gov/ publication/53617. Note: Numbers in the text and tables may not sum to totals because of rounding.

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