WASHINGTON BUREAU — Most observers still expect the government’s American International Group (AIG) Inc. Investment Program to generate “significant losses” for U.S. taxpayers, officials say.
The Congressional Oversight Panel, the body responsible for overseeing the Troubled Asset Relief Program (TARP) for Congress, presents that conclusion in an assessment of TARP released on the eve of its expiration.
Statutory authorization for the existence of TARP ends Oct. 3, panel officials say.
Some TARP supporters argue that the United States set up the program to try to keep the economy from imploding, not to earn a profit on TARP investments.
Many TARP recipients already have paid the government back, and TARP investments in those companies have produced a profit.
The investments in AIG, New York (NYSE:AIG), may do considerably worse, oversight panel officials say.
The panel says the Congressional Budget Office is projecting $36 billion in losses; the Office of Management and Budget, $50 billion; and the Treasury Department, $45 billion.
The loss estimates have decreased steadily since the government began helping AIG, but the Treasury Department’s ability to recoup its investment will depend on the value of AIG’s common stock at the time Treasury sells its stake in the company, the oversight panel says.
“The protracted investment in AIG continues to create significant risks to taxpayers,” the panel says.