Treasury more optimistic on bailout costs

WASHINGTON, Dec. 7 (UPI) -- The U.S. Treasury has sharply reduced the cost estimate for the $700 billion bank bailout program that was inherited by the Obama administration.

The Treasury is scheduled to release a report Monday that changes an early projection of a loss of $341 billion to a loss of $141 billion.

Banks have rebounded quicker than expected. The Treasury now says banks in the program have paid $10 billion in dividends and interest and returned $70 billion in principal on the funds loaned through the Troubled Asset Relief Program, The Washington Post reported Monday.

In addition, Bank of America said last week it would return its $45 billion bailout funding soon. The Treasury expects $175 billion will be returned by the end of 2010.

Since President Obama took office in January, the TARP program loaned out $7 billion in addition to more than $350 billion loaned during the Bush administration.

Lending remains tight and unemployment high, giving rise to the perception that Washington came to the aid of wealthy bankers, leaving Main Street to bear the burden of the recovery.

House Minority Leader John Boehner, R-Ohio, quickly called for the $200 windfall to go towards deficit reduction.