by Calculated Risk on 7/22/2008 12:11:00 PM

Here is the letter from the CBO.

[M]any analysts and traders believe that there is a significant likelihood that conditions in the housing and financial markets could deteriorate more than already reflected on the GSEs’ balance sheets, and such continuing problems would increase the probability that this new authority would have to be used. Taking into account the probability of various possible outcomes, CBO estimates that the expected value of the federal budgetary cost from enacting this proposal would be $25 billion over fiscal years 2009 and 2010. That estimate accounts for both the possibility that federal funds would not have to be expended under the new authority and the possibility that the government would have to use that authority to provide assistance to the GSEs.

It's important to note the the CBO analysis is a probability-weighted average method; the cost could be zero, the cost could dwarf $25 billion.