Bailout for Financial Sector to Cost More

A recent report by the Congressional Budget Office predicts that the financial sector will require much more bailout money than initially estimated. In fact, the report says that the initial estimates were short by more than $165 billion.

Financial Sector Bailout (Image: Flickr)

The new number for the bailout of the financial sector is at approximately $365 billion. In January, that same estimate was less than $190 billion. The Congressional Budget Office blames the increased cost of the bailout on the securities in question now having larger yields.

Two companies that will be eating a lot of federal bailout money are Freddie Mac and Fannie Mae. These two companies, which deal in mortgage financing, will ultimately require more than $80 billion more in bailout funding, according to the latest estimates.

It will be interesting to see what kind of public outcry there will be following the release of this news, especially considering the report that Freddie Mac and Fannie Mae are giving out $210 million in bonuses.