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Cost of US bailout cut dramatically

Published 07/12/2009

US officials have downsized dramatically the estimated cost of the credit crunch bailout
US officials have downsized dramatically the estimated cost of the credit crunch bailout

The Obama administration plans to cut its estimate of the projected costs of the government bailout programme by more than 200 billion dollars (£121bn), a US Treasury official has said.

The official said the administration now believes the cost of the programme will be at least 200 billion dollars below the 341 billion dollars (£206bn) estimate it made in August.

The official spoke on condition of anonymity because the administration's new projection has not yet been presented to the US Congress.

He said the reduced cost estimate reflected faster repayments by big banks and less spending on some of the programmes.

The administration's estimate that the 700 billion dollars (£423bn) financial rescue programme will cost at most 141 billion dollars (£85bn) is down sharply from the estimate of 341 billion dollars made in the administration's mid-session budget review in August.

The official said the new estimate will become part of the administration's new budget, which President Barack Obama will present to Congress in February.

The 700 billion dollars financial rescue programme, known as the Troubled Asset Relief Programme, was passed by Congress in October 2008 at the height of the worst financial crisis to hit the country since the 1930s.

Press Association

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