The Obama administration has announced they plan to to Cut Deficit With TARP Cash:

The Obama administration, under pressure to show it is serious about tackling the budget deficit, is seizing on an unusual target to showcase fiscal responsibility: the $700 billion financial rescue.

The administration wants to keep some of the unspent funds available for emergencies, but is considering setting aside a chunk for debt reduction.

Ok, Wall Street Journal. Firstly, how much will they use to pay down the deficit?

Secondly the losses projected vary widely. Now the WSJ reports the total losses will be about $200 Billion, down from $341 Billion, but this is just the original $700 Billion in TARP funds.

Currently we have:

The Treasury Department said about $210 billion in TARP funds remains unspent, including about $70 billion returned from financial institutions. A further $50 billion is expected to be repaid in the next 12 to 18 months.

Note the guarantees, another program beyond the original $700 Billion, according to COP, are projected to make a very slight profit.

Sounds like a good plan to use the unused and return TARP funds to pay down the deficit, yet it's very unclear if this is serious or a PR stunt.

Also, what about Citigroup? The black hole which still has the largest TARP funds?

According to the Federal Reserve all banks, including Citigroup passed the latest stress tests. The one that did not is GMAC.

The one exception, GMAC, is expected to meet its remaining buffer need by accessing the TARP Automotive Industry Financing Program, and is in discussions with the U.S. Treasury on the structure of its investment.

Regardless, isn't this robbing Peter to pay Paul?