WASHINGTON -- Stock sales are helping the government offset projected losses from its $700 billion rescue of the financial system.
The Treasury Department has brought in $35 billion in revenue over two years, boosted by ongoing sales of Citigroup stock, new data show. But the Congressional Budget Office projects taxpayers still will lose $25 billion for bailing out the financial sector and U.S. automakers.
The new total for revenue generated by the Troubled Asset Relief Program is up from the nearly $30 billion in income shown in the previous report covering the program's finances through October. Much of the additional income came from the sale of Citigroup common stock. The Treasury sold off the last of its stake in the banking giant Tuesday, ending up with receipts of $12 billion above the government's investment of $45 billion.
At least 16 South Carolina-based banks raised $610 million by selling stock under TARP. To date, one of those participants, Columbia-based SCBT Financial Corp., has repaid the money in full. The owners of Charleston-area banks -- First Federal and
Tidelands Bank -- are among those that have not yet redeemed the government's shares.
Smaller amounts of income in November came from dividend payments from other banks that received support from the bailout fund, and also from dividends from the support provided to the former financing arm of General Motors.
The estimates of the government's total losses from the program have been declining. The CBO's estimate of $25 billion in losses were made in a report in November. That's down from August, when the CBO projected the government would lose $66 billion, and March, when the forecast for losses was $109 billion.
The CBO said the lower estimates resulted from two factors. One is the continued repurchases of preferred stock by banks that received the bailout funds. The other is a lower estimated cost for assistance to insurance giant American International Group and Chrysler and GM.
TARP was developed by the previous Bush administration and passed by Congress at the height of the financial crisis in October 2008. It became widely unpopular with the public.
Republicans used voter unhappiness with the bailout and soaring federal budget deficits to help pick up six Senate seats in the November elections and take control of the House.
The Post and Courier contributed to this report.