The final price tag for the bank bailout has fluctuated ever since it passed. But the White House’s latest estimate is that it will cost $68 billion, according to President Obama’s proposed 2013 budget. That’s almost twice the estimate that the $34 billion price tag that Congressional Budget Office has most recently put on TARP.


“Yes, we disagree on the current estimate of the ‘final’ cost,” an official from the White House Office of Management and Budget said. It’s because the White House believes that all the TARP money allotted to housing assistance--$46 billion in total--will be ultimately spent, while CBO assumes that only $13 billion will be spent, the official explained.

To a certain extent, the CBO’s lower expectations make sense: the programs to help underwater homeowners have failed to meet the Obama administration’s original expectations, with only a fraction of the allotted money spent so far. But the White House’s more bullish expectations for TARP likely its ongoing hope that these programs will succeed. And it’s taken steps in recent weeks to ensure that happens, with a recent executive-branch push to expand the TARP-funded housing programs, as well as the mass refinancing program it’s proposed to Congress.

That said, both the White House and CBO’s estimates for TARP’s ultimate cost to taxpayers have fallen dramatically since the bailout was first passed: TARP was originally priced at $700 billion, but Dodd Frank reduced it to $475 billion, and banks have since been better at repaying the government funds than most people expected. The CBO’s estimate reached a new low of $19 billion in March 2011, though it’s risen since then as the stock prices of companies that haven’t fully paid back the funds—like AIG and General Motors—has declined.

But the bottom line is that the White House thinks TARP will cost more than the CBO does because it will help more homeowners directly affected by the financial meltdown. And that’s part of the reason that it’s doubled its proposed “financial crisis responsibility fee” on big banks to pay taxpayers back for the bailout, as my colleagues Jia Lynn Yang and Zach Goldfarb explain.

*Update: It turns out that the White House has long estimated that its TARP housing programs would cost $46 billion—not increased its estimate for outlays, as my original post suggested. But the CBO has still been far more conservative in estimating how much the housing program would actually cost, based on the number of people it thinks will ultimately participate.