On December 19, 2008, the Treasury announced that it would be supporting General Motors and Chrysler using the authority provided by the Troubled Asset Relief Program.  As a result, the Treasury has allocated effectively all of the first $350 billion, and will need to seek approval from Congress to allocate additional funds.

However, as noted by the Treasury, the actual disbursement of the first $350 billion remains subject to the approval of TARP Capital applications submitted by banks, many of which remain with the regulators and are not expected to reach the Treasury for review until the first quarter of 2009.

The first $350 billion under TARP has been allocated as follows:

  • TARP Capital Purchase Program – $250 billion;
  • Systemically Significant Failing Institutions Program – $40 billion (all of which was used to purchase senior preferred stock in AIG)
  • Term Asset-Backed Securities Loan Facility (TALF) – $20 billion;
  • Citigroup Financial Assistance Package – $25 billion ($20 billion in preferred stock and $5 billion in loss absorption);
  • Chrysler – Up to $4 billion loan;
  • General Motors – Up to $9.4 billion loan (plus an additional $4.0 billion conditioned on Congress releasing the second $350 billion).

In total, $348.4 billion has been allocated.  (Note: while much of the commentary states that Treasury is “out of money” pending Congressional approval to release the remaining TARP funds, the Treasury still has $1,600,000,000 that it can disperse at its discretion.)

Rather than rehash how the Treasury determined that GM and Chrysler were financial institutions and thus eligible to receive TARP funding (or whether the Treasury was correct in that determination), we are providing a list of other articles on the subject: