Estimated Cost of TARP Lowered to $50 Billion

Reported by Eamon Javers |Written by Mia Lamar

The Troubled Asset Relief Program, commonly known as TARP, will cost the U.S. government about $50 billion, far less than originally anticipated but not quite enough to allow the government to break even on the controversial bailout, CNBC has learned.

Treasury Building

Two senior administration officials—outgoing TARP chief Herb Allison and U.S. Treasury Secretary Timothy Geithner—presented the estimated costs of the program to President Obama in an economic briefing earlier Thursday, an administration official told CNBC.

The U.S. Treasury has profited by an estimated $20 billion in interest on emergency loans made to U.S. financial institutions following the collapse of Lehman Brothers in late 2008.

Still, Treasury is expected to incur losses on loans extended to U.S. automakers and troubled homeowners, also part of the $700 billion TARP program.

Earlier Thursday, American International Group , which received $182.3 billion in emergency funding, announced it had reached a deal with government officials to repay its loans. The deal includes plans to convert some AIG shares the government already owns into common stock, for sale in the open market.

The Obama administration is increasingly under pressure to disentangle itself from the largely unpopular TARP program ahead of looming midterm congressional elections.

Just last week, the Congressional Budget Office estimated the program's cost at $66 billion.