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.

The Treasury Department has sent AIG about $49 billion in TARP assistance, and AIG also owes

about $79 billion to the Federal Reserve Bank of New York (FRBNY), the panel says.

“The timing of Treasury’s exit is complicated by the fact that AIG is not permitted to repay Treasury until it has fully repaid FRBNY,” the oversight panel says.

The Treasury Department, the Federal Reserve Board, and AIG all have said they are confident that AIG will fully repay the New York Fed in the near future, the panel says.

Elsewhere in the report, the panel says TARP helped support the financial markets when they were in freefall but has been less effective at meeting other goals, such as supporting home values, retirement savings and economic growth.

“Since their pre-crisis peaks, home values have dropped 28%, and stock indices — which indicate the health of many Americans’ most significant investments for college and retirement — have fallen 30%,” the panel says. “Given that Treasury was mandated by law to use the TARP to address these measures of the economy, their lingering weakness is cause for concern.”

Because TARP failed to do much for the value of Americans’ securities and homes, it is unpopular, and, because of that unpopularity, “the greatest consequence of the TARP may be that the government has lost some of its ability to respond to financial crises,” the panel says.

Hostility toward the program may make the government less likely to authorize similar policy responses in the future, the panel says.