Now that several banks have repaid taxpayers about $70 billion of the $700 billion bank bailout know as TARP, a common question is: "Great, now where's the other $630 billion?"

This is a good question, and the answer isn't as clear-cut as many may assume.

See, not all of the money was simply doled out to banks. A lot of the $700 billion that was appropriated either hasn't been spent, or went to programs such as housing relief, auto company assistance, and credit market unclogging.

Using data from the Treasury's official bailout website -- -- here are the latest figures:



Money Still Held by Banks  

$172.6 billion 

Homeowners (mortgage modifications)

$18.3 billion   


$69.8 billion   

Auto Industry

$85 billion   

TALF ( Term Asset-Backed Securities Loan Facility)

$20 billion   

Already Repaid

$70 billion

Uncommitted/Not Yet Spent

$264.3 billion


$700 billion

Now, some programs have money committed to them but haven't started yet. For example, up to $100 billion was committed to a public-private investment fund designed to buy toxic assets directly from banks. But this program is having trouble getting off the ground and parts may never be implemented at all. Another $15 billion was allocated to purchase small-business loans, but hasn't started either.

Furthermore, the mortgage modification program has a total allocation of $50 billion, compared to the $18.3 billion already spent. TALF has a total commitment of $55 billion, compared to the $20 billion currently used. Take all of these into consideration (including the repaid TARP funds), and there's probably around $150 billion in actual uncommitted money left.

On the banking side, $95 billion of the $172.6 billion still in banks' hands sits with Citigroup (NYSE:C) and Bank of America (NYSE:BAC). Wells Fargo (NYSE:WFC) has another $25 billion, and the rest sits with hundreds of smaller banks. Last week, 10 of the 19 largest banks, including Goldman Sachs (NYSE:GS), JPMorgan Chase (NYSE:JPM), American Express (NYSE:AXP), and Morgan Stanley (NYSE:MS), returned their bailout proceeds in full.

Great! What now?
The question now is how much more money we can expect to be repaid. The honest answer is no one really has a clue, but we can at least make a few assumptions.  

Citigroup's $50 billion is now primarily in the form of common stock. That makes it easier to turn the investment into cash, but causes its value to become susceptible to the mood of the market. I wouldn't be surprised if the government started selling small chunks of shares in the months ahead, if only to reassure the world that it doesn't plan on overstaying its welcome.

Bank of America's $45 billion is all in preferred stock, so it has to pay the Treasury back directly. Right now, there's almost no chance of that happening. At today's prices, raising $45 billion in extra equity would mean a 50%-60% dilution on top of the dilutive tsunami that shareholders already experienced after the stress test results. Until the economy radically improves, B of A will be firmly suckling the government's teat. There's no getting around that.

Wells Fargo shouldn't have any problem repaying taxpayers, but it'll take awhile. It's in an awkward position of being an earnings machine thanks to its low cost of capital, but still holding a fair amount of questionable real estate assets.

As for the auto industry, repayment depends on how quickly sales rebound and how efficiently management can cut costs and streamline operations. I've expressed my doubt in this area, and wouldn't count on miracles.

Taxpayers have committed $50 billion for a 60.8% equity stake in General Motors. For comparison's sake, GM's market cap hit an all-time high in 1999 (during an epic stock bubble) at about $57 billion. This isn't perfectly comparable because of an altered capital structure, but it indicates that taxpayers probably will recover only a fraction of their investment.

AIG is the big problem child here. The 79.9% equity stake taxpayers own is worth beans. The repayment plan relies on selling business units that are still healthy. In any other economic period, this would be a cinch. In today's world, it's pretty much a joke because buyers are scarce, if not nonexistent.

At best, it can sell assets for fire-sale prices and hope the total comes remotely close to what it owes us. Ideally, we'd wait for the economy to rebound before selling assets in order to get reasonable prices, but this is constrained by the politics of the matter -- people want to see immediate results.  

Moving on
So, what happened to the $700 billion bank bailout? A lot of it was never spent; a lot of it is already being returned; and a lot of it was sunk into companies that'll struggle to pay it back. Is it ideal? Nah. But, hey, three months ago, many didn't think we'd ever be talking about banks repaying taxpayers at all, let alone in full.

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Fool contributor Morgan Housel doesn't own shares in any of the companies mentioned in this article. American Express is a Motley Fool Inside Value selection. The Fool owns shares of American Express. The Fool has a disclosure policy.