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TARP Getting Even Cheaper

TARP may end up going down as one of the most successful policy initiatives in American history:

The projected cost of the $700-billion financial bailout fund — initially feared to be a huge hit to taxpayers — continues to drop, with the nonpartisan Congressional Budget Office estimating Monday that losses would amount to just $25 billion.

That's a sharp drop from the CBO's last estimate, in August, of a $66-billion loss for the Troubled Asset Relief Program, known as TARP. Going back to March, the budget office estimated that the program would cost taxpayers $109 billion.

The new, more optimistic forecast largely reflects money the Treasury Department has received as banks have repaid their loans and repurchased stock warrants. It also takes into account lower estimated costs for assistance to insurance giant American International Group Inc. and General Motors Corp., which recently held a highly successful initial public offering, the CBO said.