Financial Rescue May Cost Taxpayers $23.7 Trillionby Tim Manni
That’s according to a report released yesterday by Neil Barofsky, the man in charge of overseeing the Troubled Asset Relief Program (TARP). Barofsky believes that TARP’s $700 billion price tag is only the tip of the iceberg in terms of what the country’s financial rescue will cost taxpayers:
Barofsky’s estimates include $2.3 trillion in programs offered by the Federal Deposit Insurance Corp., $7.4 trillion in TARP and other aid from the Treasury and $7.2 trillion in federal money for Fannie Mae, Freddie Mac, credit unions, Veterans Affairs and other federal programs.
However, Barofsky’s estimates have drummed up opposition from the Treasury Department. Treasury spokesperson Andrew Williams believes the inspector’s estimates are inaccurate:
“These estimates of potential exposures do not provide a useful framework for evaluating the potential cost of these programs,” Williams said. “This estimate includes programs at their hypothetical maximum size, and it was never likely that the programs would be maxed out at the same time.”
Barofsky contends that the Treasury hasn’t fulfilled their promise of increased transparency, and that taxpayers have no idea what TARP is costing them:
Barofsky offered criticism in a separate quarterly report of Treasury’s implementation of TARP, saying the department has “repeatedly failed to adopt recommendations” needed to provide transparency and fulfill the administration’s goal to implement TARP “with the highest degree of accountability.”
As a result, taxpayers don’t know how TARP recipients are using the money or the value of the investments, he said in the report.
With the numbers rising, taxpayers should be worried about the increased potential for fraud. Barofsky said his office is investigating 35 criminal and civil cases “that include suspected accounting, securities and mortgage fraud; insider trading; and tax investigations related to the abuse of TARP programs.”