The cost of bailing out the savings and loan industry will reach nearly $500 billion, with 87% of the tab paid by taxpayers, according to a study released Friday by the General Accounting Office.

The GAO said the biggest chunk of the total - $209 billion - is interest owed on money appropriated for the cleanup, which includes $87.9 billion spent by the Resolution Trust Corp. and $64.7 billion spent by the defunct Federal Savings and Loan Insurance Corp.

Another $111.8 billion of the total cost comprises interest on thrift bailout bonds. Finally, GAO said, $7.5 billion of tax breaks were handed out to acquirers of failed thrifts.

Not included in the GAO's estimate is the cost of the Supreme Court's ruling in the goodwill case. The decision could cost the government from $9 billion to $20 billion, according to House Banking Committee Chairman Jim Leach.

The bailout's high cost demonstrates that failure to resolve the savings and loan crisis early was "the biggest domestic policy mistake of the 1980s," the Iowa Republican said.

Senate Banking Committee Chairman Alfonse M. D'Amato said, "The GAO report underscores the need for this Congress to act on pending BIF/SAIF legislation to avert any future problems involving federal deposit insurance funds and to protect the American taxpayer."

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.