Oops, U.S. Gave $78 Billion Too Much to Bail Out Banks

The Congressional Oversight Panel announced Friday that George Bush's administration overpaid tens of billions of dollars bailing out Wall Street banks last year. That overpayment that came from taxpayers stands at $78 billion.

The American International Group was one of the companies that was overpaid. They were granted $40 billion when they were only valued at $14.8 million. Congress had already been wary of Bush's Troubled Asset Relief Program. The former United States Treasury Secretary Henry Paulson had written that the Treasury was paying $1 for every $1 dollar of asset. The Associated Press reports:

"The way the Treasury secretary described it does not fit with the numbers that were produced in our much more extensive valuation analysis," panel chairwoman Elizabeth Warren told reporters Friday. "The secretary of the Treasury described it in December that these were par transaction and that is not supported by the numbers."

New changes to the program will be released by Treasury Secretary Timothy Geithner on Monday. His program will loosen credit and help to reduce the number of foreclosures that are plaguing the US. Still the daily operations of the program remains in the hands of Neel Kashkari, a holdover from the Bush cabinet. The money has gone to banks that are deemed healthy and yet needed capital in order to grant loans.

Treasury chose to offer 'one size fits all' pricing in order to encourage all institutions to participate, and in so doing disregarded apparent differences in their financial condition," the report states. "A consequence is that Treasury effectively offered weaker participants greater subsidies than it offered to stronger participants."