SORTING OUTTHE ECONOMIC RESCUE
Slide Show

SORTING OUTTHE ECONOMIC RESCUE

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TARP, TALF, PPIP? The federal government’s slew of economic aid packages are hard to keep straight. Not only are the names an alphabet soup, but the programs keep changing as government officials adapt to shifting economic circumstances.

Here’s how we see the scorecard -- players, price tags and potential profit for Uncle Sam -- stacking up today.

The slide show begins with the navigation to the right.
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SORTING OUTTHE ECONOMIC RESCUE | Slide 2 of 12

ECONOMIC STIMULUS

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  • What it is: Temporary tax cuts, government spending on roads, bridges and other infrastructure, plus incentives for energy, health care, research and more.
  • Where it stands: About 8% of funds already disbursed. By summer 2010, about 70%.
  • What's the cost/risk: Cost to taxpayers: $787 billion in spending and loss of tax revenue.
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SORTING OUTTHE ECONOMIC RESCUE | Slide 3 of 12

TROUBLED ASSET RELIEF PROGRAM (TARP) LOANS AND LOAN GUARANTEES

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  • What it is: Made to distressed corporations, Bank of America, AIG, Citigroup, Chrysler, General Motors and auto parts makers.
  • Where it stands: Bank of America says it may be able to repay loans as soon as late this year.
  • What's the cost/risk: Taxpayers' liability is $152.4-billion.
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SORTING OUTTHE ECONOMIC RESCUE | Slide 4 of 12

TROUBLED ASSET RELIEF PROGRAM (TARP) CAPITAL PURCHASE PROGRAM

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  • What it is: Cash infusions in exchange for ownership stakes in AIG, Citigroup, Bank of America, Goldman Sachs and about 500 other banks
  • Where it stands: A handful of smaller banks have repurchased shares. Larger ones are eager to do so, but the White House fears that will curb their ability to lend to consumers and businesses.
  • What's the cost/risk: $218-billion taxpayer liability. If shares increase in value, taxpayers make a profit.
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SORTING OUTTHE ECONOMIC RESCUE | Slide 5 of 12

TERM ASSET-BACKED SECURITIES LOAN FACILITY (TALF)

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  • What it is: $20 billion in Federal Reserve nonrecourse loans to private investors to purchase securities backed by car loans, credit card debt, student loans, small business and other loans. $5 billion in loan sand loan guarantees extended so far.
  • Where it stands: A $35-billion program extension for securities backed by other loans, such as those for vehicle fleets and business equipment, is pending.
  • What's the cost/risk: TARP funds from Treasury used to guarantee the first $55 billion in loans. Federal Reserve liability could be $500 billion.
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SORTING OUTTHE ECONOMIC RESCUE | Slide 6 of 12

PUBLIC-PRIVATE INVESTMENT PROGRAM (PPIP)

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  • What it is: Treasury funds used to match private investor equity funds (50-50 split) and to finance the purchase of mortgage backed securities (legacy securities) and troubled loans and assets (legacy loans). Treasury expects to generate $500 billion to $1 trillion in asset purchases.
  • Where it stands: For legacy securities, investor applications have been filed and initial decisions are expected by May 15. Initiation of the legacy loan progam is still pending FDIC guidance.
  • What's the cost/risk: $100 billion Treasury outlay from TARP. Potential taxpayer liability: About $1 trillion. Profit potential if investment values grow.
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SORTING OUTTHE ECONOMIC RESCUE | Slide 7 of 12

HOMEOWNER AFFORDABILITY AND STABILITY PLAN

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  • What it is: Subsidies and incentives for mortgages modifications plus help for communities and displaced lenders.
  • Where it stands: Guidelines established and contracts with loan servicers signed. No mortgages have been modified yet.
  • What's the cost/risk: Up to $75 billion in taxpayer costs, coming from TARP funds.
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SORTING OUTTHE ECONOMIC RESCUE | Slide 8 of 12

COMMERCIAL PAPERFUNDING FACILITY

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  • What it is: Direct Federal Reserve short-term lending to corporations to meet payroll and other cash needs.
  • Where it stands: As of April 2, the Fed held $249.7 billion in such loans.
  • What's the cost/risk: Maximum Fed liability: $1.8 trillion.
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SORTING OUTTHE ECONOMIC RESCUE | Slide 9 of 12

SMALL BUSINESS ADMINISTRATION LOAN PURCHASE PROGRAM

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  • What it is: SBA will purchase securitized SBA-guaranteed loans.
  • Where it stands: Little interest expressed so far by the holders of eligible securities.
  • What's the cost/risk: Maximum taxpayer liability: $15 billion.
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SORTING OUTTHE ECONOMIC RESCUE | Slide 10 of 12

ASSISTANCE TO FANNIE MAEAND FREDDIE MAC

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  • What it is: Capital infusions in exchange for shares.
  • Where it stands: About $60 billion provided so far. Authority expires at end of year. It may be extended.
  • What's the cost/risk: Up to $400 billion in taxpayer liability. Taxpayers may make a profit if shares increase in value.
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SORTING OUTTHE ECONOMIC RESCUE | Slide 11 of 12

FED MONEY MARKET INVESTOR FUNDING FACILITY

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  • What it is: Loans to mutual funds to purchase commercial paper, other short-term, highly rated debt.
  • Where it stands: So far, program hasn’t been used.
  • What's the cost/risk:Potential Fed liability of up to $540 billion.
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SORTING OUTTHE ECONOMIC RESCUE | Slide 12 of 12

CREDIT LINE FOR AIG

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  • What it is: $60 billion government credit line, using troubled AIG assets as security.
  • Where it stands: $35 billion of that being converted to other loans.
  • What's the cost/risk: Loans made by the Federal Reserve system, not by Treasury. Total liabililty: $60 billion.
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