This post has been updated.

The federal government seems to be on track in recouping the $414 billion in taxpayer money spent under the Troubled Asset Relief Program, with $120.7 billion now outstanding. But it turns out that over 130 bailed-out institutions paid back their TARP money simply by taking out loans from yet another government program, suggesting that the government--and taxpayers--actually haven’t gotten paid back yet.

A new report from the Government Accountability Office, flagged by the Roosevelt Institute’s Matt Stoeller, shows that 40 percent of the 341 institutions that have exited TARP’s biggest single initiative--the $205 billion Capital Purchase Program--simply refinanced their loans through a separate, $30 billion government program known as the Small Business Loan Fund (SBLF below).



(SOURCE: GOVERNMENT ACCOUNTABILITY OFFICE)

The Small Business Loan Fund was part of legislation that passed in September 2010; it closed a year later. Some deemed it to be a flop for having failed to disperse most of its funds, so it was an obvious choice for qualifying TARP banks who still need government loans. But like the original TARP, the Small Business Loan Fund--dubbed “TARP 2.0” by its opponents--wasn’t paid for up front, so its ultimate fiscal impact will depend on if and when banks finally pay their loans back.

That’s not to say that the Capital Purchase Program--or TARP itself--has been a failure. Only 4 percent of institutions left the CPP because they went bankrupt. Twenty-eight more institutions left by refinancing through another part of TARP, Community Development Financial Institutions, which aims to operate in underserved markets. And the Congressional Budget Office still expects the ultimate cost of the bailout to be $34 billion, which is a fraction of what similar interventions cost elsewhere, as Deborah Solomon explains.

And the 137 financial institutions that hopped from TARP to the Small Business Loan Fund could very well make good on the government loans they’re still borrowing. They just haven’t done so yet.

Update:

Treasury spokesman Matt Anderson e-mailed me to point out that the law creating the Small Business Lending Fund “specifically required that banks who participate in TARP could participate in SBLF,” adding that the banks capitalized through the fund also have “the same incentive to increase their lending to small businesses under the program.” This doesn’t change the fact that TARP is being repaid with other public funds, though it does show that the government was well prepared to provide alternate ways for firms to exit TARP.