By Renuka Rayasam, Associate Editor May 29, 2009 With the budget deficit growing and the financial sector stabilizing, it won't be long before politicians start talking about using repaid bank rescue funds to pay down the federal debt. Don't believe the rhetoric. Political math is more an art than a science. And in this picture, budget painters have already taken into account losses for the year of around $300 billion. Total losses from the Troubled Asset Relief Program, the federal program used to help save troubled banks, could be well upward of that, at least half of the $700 billion Treasury has to play with.In April, both the Office of Management and Budget and the Congressional Budget Office changed the way they account for TARP funds. The funds would be accounted for in a manner closely resembling bank accounting rather than traditional government math. In other words, on paper, rather than $700 billion going out the door all at once, returns and losses on the investments will be accounted for annually. As money gets repaid, the federal budget deficit won't be affected because the repayments have already been figured in. So far, the Treasury department has funneled more than $600 billion to various programs under the murky mandate of purchasing troubled assets from financial institutions. Practically speaking, that has translated into billions of dollars going to prop up insurer AIG, assistance for U.S. auto makers and to slow down the rapid pace of home foreclosures. Close to a third of the money spent has gone to these three efforts and that money will almost certainly never be repaid to Uncle Sam. Bank rescue programs stand a far better chance of being repaid. Already, Goldman Sachs, JP Morgan Chase and Morgan Stanley are publicly talking about how to pay back shares the government has purchased. And programs to buy toxic assets off bank balance sheets may not yield a taxpayer bonanza, but don't have to be big money losers depending on what price banks are willing to accept.Treasury officials are racing to get congressional approval for committing unused funds and expanding the program. They'd like to be able to give money to life insurers and banks with assets under $500 million. The Treasury department has until the end of 2009 to make pledges, but the unprecedented nature of the TARP legislation has meant that the administration is pretty much winging it on much of the implementation of the fund allocation. One Treasury official chafed at the idea that the department would relinquish control of the funds anytime soon, saying that the last thing it want to do is give up too quickly. If financial companies receive another shock that would send their shares plunging, federal budget deficit and debt estimates would be the last thing on their minds.