February 5, 2009

Panel says Treasury overpaid $78 billion

Harvard Professor Elizabeth Warren, chairwoman of a bailout oversight panel, said the U.S. Treasury Department had overpaid $78 billion in bailout funds.

In testimony before the Senate Banking Committee, Warren said the value of $254 billion worth of assets purchased by the Treasury was $176 billion, The Washington Post reported Thursday.

That left a shortfall of about $78 billion, she said.

While fiscally imprudent, there may be good policy reasons for overpaying, but without clearly delineating reasons, we can't know that, she said.

A recent report by the Congressional Budget Office came up with an overpayment figure of $64 billion, a number that was understated, Warren said.

Sen. Evan Bayh, D-Ind.,said Congress would likely sit on the second half of the bailout funds until there were air-tight assurances that the taxpayers' money was handled better, the Post reported.

We may have stabilized the financial markets, but at the cost of losing the public's confidence, Bayh said.

The program needs accountability, accountability, accountability, he said.