Bureau gives new meaning to blowing hundred dollar bills

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The much-anticipated new hundred-dollar bill will not be in circulation just yet. The redesigned bills were originally planned for release in early 2011, but encountered printing problem after printing problem, prolonging their distribution.

But the latest blunder, the New Yorker reported on Tuesday, might be the most costly yet.

According to the Bureau of Engraving and Printing, their D.C. factory location produced a botched batch of more than 30 million hundred-dollar bills—that makes for a useless 3 billion dollars.

The latest printing error, called "mashing," results when too much ink is applied to the paper and does not fit within the marked parameters, making for imprecise details on the bill's artwork.

The Federal Reserve, which deemed the batch unacceptable, is returning the bills and demanding for a refund, but it's the taxpayers who are also paying for the printing error.

The process of producing and transporting the corrected bills to replace the botched batch as well as disposing of the defective dollars will be financed by taxpayer money.

The Bureau's director, Larry Felix, has pressured the second printing location, in Fort Worth, Tex., to accelerate its production to meet its distribution deadlines.

A Bureau of Engraving and Printing spokesperson recently issued a statement addressing the printing error: "The release of the redesigned $100 note by the Board of Governors of the Federal Reserve System, the issuing authority for U.S. currency, is expected this fall.

The Bureau of Engraving and Printing is on schedule to deliver the complete order of redesigned $100 notes to the Federal Reserve for circulation.

Production of the note continues ahead of schedule at the Bureau's Western Currency Facility (WCF), though production at the Washington, DC Facility has been temporarily halted to address concerns encountered during production validation, which the Bureau expects to resolve shortly."

Read the full New Yorker story here.

—By Natalie Sportelli, Special to CNBC.com. Follow her @N_Sportelli.