This week, the administration has been trumpeting the news that the $700 billion TARP is likely to ultimately cost much less than early estimates. That’s true, but far from the whole story.

The government’s best estimate, released Wednesday, is that the bailouts of AIG and the auto companies will ultimately cost taxpayers about $61 billion. It also forecast that other parts of the TARP will end up making taxpayers money. Put it all together, and the final estimated loss from the bailout’s first full year (thru September 2009) is about $41.6 billion. (See our table below.)

The projections reflect only spending through September of this year.

It’s certainly true that the picture has brightened in the past year. When the Congressional Budget Office took a look in January at the TARP’s main bank bailout program, it estimated that the government was about $32 billion in the hole from those investments. With the freshening of the economy and recent reimbursements by the major banks (Bank of America in particular), the Treasury now forecasts that the program will end up making the taxpayer about $15 billion.

But the Treasury’s numbers aren’t the whole story. The latest estimate accounts for only the first year of spending, and the TARP’s spending isn’t done. Treasury says it expects the ultimate cost to be higher. Treasury Secretary Tim Geithner extended the TARP thru Oct. 3, 2010, the TARP’s second birthday, earlier this week. He said, though, that Treasury didn’t expect to deploy more than $550 billion of the $700 billion available. As of today, Treasury has committed a total of about $407.3 billion (that’s excluding companies that have refunded their bailout money).

Because the latest estimate deals only with the TARP’s first year, it doesn’t include two big programs that recently ramped up.  The foreclosure prevention program, in terms of spending, is just getting started. It’s unclear how much of the $50 billion set aside for that program will ultimately be spent, because of the program’s difficulties:  As of the end of October, Treasury had paid only $2.3 million in incentives to servicers. But whatever Treasury ultimately spends, none of that money will come back, since the program involves subsidies, not investments.

The $30 billion toxic asset purchase program also got started only in the past couple months. That program involves investments and loans, but it’s hard at this point to forecast how it will fare.

The second thing to keep in mind is that the Treasury has also sunk more than $110 billion into Fannie Mae and Freddie Mac. That spending wasn’t part of the administration’s estimates, because it wasn’t done via the TARP.

Treasury also forecasts big losses in other parts of the TARP. Approximately $73 billion went to auto companies; Treasury currently expects to lose about $30.5 billion of that. The AIG bailout fares much worse: $43.2 billion had been spent through September and  Treasury forecasts losing $30.4 billion (about 70 percent!). And here’s another opportunity to add a caveat: The projected losses on AIG don’t include $2.1 billion that was loaned last month – and the Treasury could loan as much as $24.5 billion more.

Of course, all these are estimates. If the economy continues to improve and the car market booms, then the government might not lose quite so much in its investment in GM, for example. In the meantime, we will continue to post our monthly updates on the bailout, which rely on hard numbers to give you an accurate picture of how the taxpayer is faring.