The Washington Post reports that the cost of the bailout is going up—by more than $30 billion. Writes the Post:
The Obama administration has repeatedly boasted how the historic rescue of Wall Street will cost taxpayers far less than originally expected. But the budget proposal released Monday came with some unwelcome news: The price tag of the bailout is suddenly going up.
As a result, the administration said it will seek twice as much money from its proposed bank tax compared with last year, $61 billion vs. $30 billion.
A main reason for the increased bailout cost is that the government’s stock holdings of companies rescued by taxpayers have fallen in value. Insurance giant American International Group’s stock has fallen 36 percent in the past year while General Motors’s has tumbled 30 percent.