Wasteful

Treasury Overpaid On Bank Bailout

Former Treasury Secretary Hank Paulson repeatedly promised the government would buy bank assets at market value when he convinced lawmakers to pass last year's $700 billion rescue plan, but today congressional investigators found the Treasury overpaid for the bank bailout by $78 billion. Under the federal bailout (remember the first one?) the Treasury invested $254 billion into companies with a market value of only $176 billion-only 69 percent of the original cost. Although companies must repay all of the amount invested plus interest, minimizing the government's losses, some say this proves the incompetence and wasteful spending of the Treasury. At an oversight hearing, Sen. Richard C. Shelby asked, "Isn't that a terrible way to look after the taxpayers' money and to make purchases anywhere?" Elizabeth Warren, chairwoman of the oversight panel, responded: "Senator, Treasury simply did not do what it said it was doing."