Bailout Could Cost $25 Billion

The U.S. Treasury's rescue plan for Fannie Mae and Freddie Mac could cost the government $25 billion. The Congressional Budget Office, which calculates the fiscal impact of proposed legislation, said there was more than a 50 percent chance the U.S. would not have to intervene to save Fannie Mae and Freddie Mac over the next 18 months. However, it added there was a 5 per cent chance that the Treasury would have to plug about $100 billion in additional losses at the ailing mortgage giants if conditions in the housing market worsened. The combination of these probabilities, as well as other factors, resulted in the $25 billion estimate.