Sticker Shock: $23.7 Trillion Bailout?

Sitting down?

"The total potential federal government support could reach up to $23.7 trillion," says Neil Barofsky, the special inspector general for the Troubled Asset Relief Program, in a report released today on the government's efforts to fix the financial system.

Yes, $23.7 trillion.

"The potential financial commitment the American taxpayers could be responsible for is of a size and scope that isn't even imaginable," said Rep. Darrell Issa, R-Calif., ranking member on the House Oversight and Government Reform Committee.

"If you spent a million dollars a day going back to the birth of Christ, that wouldn't even come close to just $1 trillion -- $23.7 trillion is a staggering figure."

To be sure, we aren't there yet.

The government has about 50 different programs to fight the current recession, including programs to bail out ailing banks and automakers, boost lending and beat back the housing crisis. So far they've cost taxpayers around $4 trillion.

But Barofsky says if each federal agency spent the maximum potential amount involved in these initiatives, taxpayers could be on the hook for trillions more.

The staggering $23.7 trillion estimate elicited concern from members of Congress and a sharp rebuke from the Treasury Department after the report was leaked late Monday.

Treasury spokesman Andrew Williams called the estimate "inflated," saying it "does not provide a useful framework for evaluating the potential cost of these programs."

He said utilization of the department's financial rescue programs has begun to decline, and some banks have already repaid $70 billion in TARP funds.

Other financial experts also questioned the significance of Barofsky's potential TARP price tag.

"I'm not sure how you could come up with a number like [$23.7 trillion] without lots of assumptions involved," said Kevin Petrasic, a private financial services lawyer with broad government experience.

"Throwing out a number you can't provide a tremendous amount of insight about: what's in that? You just get a headline. Why do we even need to know that this number, in a worst case scenario, is the number? What is gained from that?"

In his appearance before the House Oversight and Government Reform Committee today, Barofsky insisted his report provides a valuable accounting of taxpayer dollars.

"We take offense to [Treasury's] comments," he said. "These numbers are from the government."

He said the $23.7 trillion figure in his quarterly report was derived from publicly available data on allocations to the government's various bailout programs.

"We've explained the number does include some programs that have terminated… and it isn't that the taxpayer is on the hook for $23.7 trillion – we don't say it, we don't suggest it," Barofsky said. "The actual potential for losses," he says, "is likely to be lower."

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