Economy & Budget

CBO confirms $24 billion loss on bailouts

CBO confirms $24 billion loss on bailouts

According to CNS News, Barack Obama is still running around and claiming “we got back every dime we used to rescue the financial system.”  Like so many other Obama and Biden statements, that is absolutely false:

The Congressional Budget Office–based on figures from Obama’s own Office of Management and Budget—gives a different assessment.

“The cost to the federal government of the TARP’s transactions (also referred to as the subsidy cost), including grants for mortgage programs that have not yet been made, will amount to $24 billion,” said the CBO report, which was released on the same day Obama spoke.

TARP is the Troubled Asset Relief Program – the formal name of the government’s financial bailout program passed in October 2008.

CBO said that the cost of TARP “stems largely from assistance to American International Group (AIG), aid to the automotive industry, and grant programs aimed at avoiding home mortgage foreclosures,” noting that the losses will be so large they will eclipse the financial gains the government will realize from bailing out other large financial institutions.

In fact, CBO reported that as of now $65 billion in TARP funds remain outstanding.

This is a strange thing for Obama to lie about, since he is surely aware of the CBO’s accounting, and must have known the American people would become aware of it, too.  (If the media hasn’t been eager to inform them, the Romney campaign certainly will.)

Why didn’t Obama just say, “The bailouts cost us a mere $24 billion, a fair price to pay for rescuing the financial and automotive industries?”  $24 billion is a drop in the bucket of Obama’s trillion-dollar deficits.  It’s not really a lot of money by the standards of modern Washington.  Why is it so important for him to falsely assure the American people that the bailout was essentially “free?”

Is it because he doesn’t want people wondering why twenty-four billion taxpayer-shucked clams looks like an appetizer to him?  Or does he think his campaign won’t survive any more criticism about his lousy “investment” skills?  Perhaps it’s his vigor to preserve the image of the General Motors bailout as a stunning success that repaid the taxpayers in full.

At any rate, it’s not true, and Mitt Romney should make sure today is the last day Obama can say it without getting laughed off the stage.  The time for hideously expensive fairy tales is long past over.

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