The Congressional Budget Office’s assessment of the cost of a bailout of Freddie Mac and Fannie Mae is refreshingly honest, but disconcertingly uncertain. The price could be zero, the price could be $100 billion, but the best-guess expected cost is $25 billion.

Here is how the CBO puts it in a letter summarizing its report:

… there is a significant chance — probably better than 50 percent –that the proposed new Treasury authority would not be used before it expired at the end of December 2009. If the proposal is enacted, private markets might be sufficiently reassured to provide the GSEs with adequate capital to continue operations without any infusion of funds from the Treasury; during that time, it is possible that expectations about the duration and depth of the housing market downturn may brighten. Under that scenario, the temporary authority would not be used and thus would involve no budgetary cost.

On the other hand:

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.

Finally: the CBO analysis suggests there is “almost a 5 percent chance that the added losses would total more than $100 billion.”

This variety of possible outcomes reflects the fact that no one can know the number of future mortgage defaults on Fannie- and Freddie-backed mortgages. Unlike banks, whose write-downs are for a number certain (which does not mean they know exactly how much they’ll lose), the CBO can waver and wander. That makes it sound like no one really know what’s going on, which just may be the truth.