What is the current impact of TARP (bank bailout) on US deficit?

Question

As far as I am aware, at least some of the money that was given by US Government under TARP was paid back to the government.

As such, how much of the ~$800 Billion was given back to the treasury and how much was not?

In other words, what is the contribution of TARP to budget deficit as of 1/1/2013?

(if you wish, for extra credit you can include side amounts such as interest paid on TARP borrowing by the Feds, on one hand - and the interest the financial institutions paid to the government on the money they got from TARP on the other. I doubt that either one would have a significant effect though).

Answer 1

OK, based on Daily TARP Update for 2/1/2013 from US Treasury:

| ($Billions)        | Loaned | Repaid | Balance | Writeoff | Income | CashBack |
=====================+========+========+=========+==========+========+==========|
| Bank bailouts only | 250.46 | 234.00 | 16.46   | 3.15     | 6.65   | 268.16   |
| Total TARP paid    | 418.11 | 344.43 | 73.68   | 27.10    | 43.02  | 387.46   |
| TARP + AIG shares  | 418.11 | 344.43 | 73.68   | 27.10    | 60.58  | 405.01   |

Therefore, of $418 Billion TARP, the government was directly repaid $344.43 Billion ($73.68 balance), or $387 Billion if you include interest and other non-principal payments excluding AIG shares ($30.65 Billion balance). This drops to $13.1 Billion once AIG shares held by Treasury are included.

Therefore, the total DIRECT TARP contribution to 2012 YE deficit was $13.1 Billion, plus or minus pocket change of couple billion depending on if you trust governments valuation of some assets.

This figure would, however, rise slightly if you remember that TARP - all $418 Billion of it - contributed to deficit and therefore had to be borrowed. Therefore, the figure should theoretically include the borrowing costs of that $418.11B, which I didn't since I don't have a good schedule of repayments.

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NOTE1: To clarify based on Chad's comments - I have included the "Writeoff" column just for color, but neither the "Balance" column (which I personally calculated simply as Loaned-Repaid), nor "CashBack" column (which I checked to be exactly "Repaid+Income"), include writeoffs as an asset. The only report column which included writeoffs as asset is "Outstanding", which I didn't use at all.

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NOTE2: In case someone is curious WHY there was extra income, as I aluded to in the last note, recall that - on top of simple interest and fees paid by TARP recipients - some of TARP was in the form of "Government paid for distressed assets, which were later sold off". As one example, Maiden Lane transactions (Bear Stearns and AIG assets) netted the government profits:

In a February 28, 2012 press release, the New York Fed announced that the remaining securities in ML II were sold, and will result in full repayment of the $19.5 billion loan extended by the New York Fed to ML II and generate a net gain for the benefit of the public of approximately $2.8 billion, including $580 million in accrued interest on the loan.

On Thursday August 23, 2012, the Federal Reserve announced that Maiden Lane III had sold the last of its AIG portfolio that day. The Fed had earned a profit of $17.7 billion from the AIG and related assets. The bulk of all Fed profits are required by Fed rules be turned over to the U.S. Treasury. The Treasury still held a 53 percent stake in AIG's stock which it planned to gradually sell in an effort to recover the remaining $24.2 billion investment (note - the latter was part of the difference between lines 2 and 3 of my spreadsheet above).