In his final day as the Special Inspector General for the Troubled Asset Relief Program, Neil Barofsky settled into his seat before lawmakers Wednesday to give one final warning on the most controversial and expansive rescue plan the U.S. government has ever dreamed up. The Treasury Department launched TARP in October 2008 to buy up troubled assets and preferred stock of the nation’s largest and most exposed  financial institutions. The Treasury was originally cleared to spend $700 billion in funding, but on Wednesday, the Congressional Budget Office estimated $432 billion will end up being disbursed. The CBO said the final cost of the program will be $19 billion after repayments. But Barofsky, the chief watchdog of the program, said before the House subcommittee on TARP, that the $19 billion, while good news, is not the largest deficit from taxpayers. “While the reduction in the anticipated direct financial costs of TARP from hundreds of billions of dollars to potentially $19 billion is certainly good news, the total cost of TARP necessarily involves far more than just dollars and cents,” Barofsky said. Barofsky took the job in December 2008, and through his investigations and audits, his office has prevented more than $555 million in TARP fraud. There are 158 ongoing investigations, which include 77 executives who applied to or received TARP funding. In his many congressional hearings, Barofsky has often been the most pointed and direct witnesses. In his final appearance as SIGTARP Wednesday, Barofsky described a financial world as free-wheeling and impervious to disaster as ever. “The prospect of a government bailout reduces market discipline, giving creditors, investors and counterparties less incentive to monitor vigilantly those institutions that they perceive will not be allowed to fail,” Barofsky said. “For executives at such institutions, the government safety net provides the motivation to take greater risks than they otherwise would in search of ever-greater profits.” His counterpart on many of these panels has been Tim Massad, the assistat secretary to the Treasury. Massad has often been charged as the lone defender of the program, and he has painstakingly repeated why TARP was needed. He did the same thing Wednesday. “In discussing the ‘too big to fail’ problem, we must remember the situation we faced in the fall of 2008, and why TARP was needed,” Massad said. “Credit markets froze. And the over-reliance on short-term financing, opaque markets and excessive-risk taking that had been the source of significant profit on Wall Street and in financial capitals globally, fed a panic that was producing the classic signs of a generalized run. For the first time in 80 years, we faced the risk of a complete collapse of our financial system.” Much of Massad’s testimony Wednesday and at previous hearings stressed the need to view TARP as a counterpart to the equally historic Dodd-Frank Act. Through these reforms, Massad said the the government now has the authority “to shut down and break apart large nonbank financial firms whose imminent failure might threaten the broader system.” These include the the establishment of a Financial Stability Oversight Council with powers to oversee rulemaking under Dodd-Frank. And it also gave the Federal Deposit Insurance Corp. new resolution authority for institutions deemed systemically important. Barofsky argued, however, that the public is being asked once again to trust regulators who have failed them before. “Whether these provisions will ultimately be successful remains to be seen. They rely heavily on many of the very same financial regulators whose ‘widespread failures in financial regulation and supervision proved devastating to the stability of the nation’s financial markets,’ according to the Financial Crisis Inquiry Commission,” Barofsky said. Massad maintains however that had these regulators not acted through TARP, the results would have been “catastrophic.” “The legacy of TARP is that it worked: it helped bring stability to the financial system and laid the foundation for economic recovery,” Massad said. “And, it did so at a fraction of the expected cost.” Barofsky will step down as SIGTARP tomorrow and will join the New York University School of Law as an adjunct professor. He concluded that even though Dodd-Frank provides new framework for winding companies down for which there was no plan before, much work remains. “Indeed, based on the market’s reaction to date, the early results have been far from encouraging,” Barofsky said. “Nevertheless, bold regulatory action, as embodied in the forceful advocacy of (FDIC Chairman Sheila Bair), is still at least possible. Unfortunately, the status quo has powerful defenders, and only time will tell whether the agents of meaningful change will prevail. The stakes – the future integrity of our financial system – could not be higher.” Write to Jon Prior. Follow him on Twitter @JonAPrior.