President Obama, striking an emphatic and populist tone, said Thursday that he is determined to recoup every dollar spent from the $700 billion Troubled Asset Relief Program to rescue Wall Street firms with a new tax on the largest banks.
"We want our money and we're going to get it back," he said.
Obama described bank bonuses as "obscene" and said the new tax would cover a projected $117 billion shortfall in the government's financial crisis bailout fund.
"My determination to achieve this goal is only heightened when I see reports of massive profits and obscene bonuses at the very firms who owe their continued existence to the American people who have not been made whole, and who continue to face real hardship in this recession," Obama said.
In proposing the tax, Obama and his advisers are capitalizing on public antipathy toward banks blamed for causing the crisis, while at the same time addressing a desire to show progress toward reducing record federal deficits.
The president is proposing a levy of 15 basis points, or 15 percent, on the liabilities of large financial institutions. The tax, which officials are calling a "financial crisis responsibility fee," would apply only to financial companies with assets of more than $50 billion. Those firms -- estimated to amount to about 50 institutions -- would have to pay the fee even though many did not accept any taxpayer assistance and most others already paid back the government lent to them.
The administration expects that 60 percent of the revenue would come from the 10 largest firms. As proposed, the fee would go into effect June 30, 2010, and last at least 10 years.
Obama advisers believe the administration can make an argument that banks should tap their generous executive bonus pools for the fee instead of passing the cost on to consumers.
At issue is the net cost of TARP, the fund initiated by the Bush administration to help financial institutions get rid of toxic assets. The fund has since evolved, helping not only the banking sector, but also autos and homeowners.
Insurance conglomerate American International Group, the largest beneficiary with nearly $70 billion in bailouts, would have to pay the tax. But General Motors Co. and Chrysler Group LLC, whose $66 billion in government loans are not expected to be fully repaid, would not be subject to a tax.
Bankers did not hide their objections.
"Politics have overtaken the economics," said Scott Talbott, the chief lobbyist for the Financial Services Roundtable, a group representing large Wall Street institutions. "This is a punitive tax on companies that repaid TARP in full or never took TARP."
Jamie Dimon, chief executive of JPMorgan Chase & Co., speaking to reporters Wednesday before details of the tax were known, said: "Using tax policy to punish people is a bad idea."
"It would be very hard for the industry to pay for the auto companies," Dimon added. "I mean, at one point you have to be a little fair."
FOXNews.com - Obama to Bankers: 'We Want Our Money Back'
Listening to Obama speak about this--I have some questions:
While I agree that new banking regulations need to be made on Wall Street--to stop these boom & bust periods--why hasn't this administration & overwhelming democrat congress enacted new regulations?
Your comments?
"We want our money and we're going to get it back," he said.
Obama described bank bonuses as "obscene" and said the new tax would cover a projected $117 billion shortfall in the government's financial crisis bailout fund.
"My determination to achieve this goal is only heightened when I see reports of massive profits and obscene bonuses at the very firms who owe their continued existence to the American people who have not been made whole, and who continue to face real hardship in this recession," Obama said.
In proposing the tax, Obama and his advisers are capitalizing on public antipathy toward banks blamed for causing the crisis, while at the same time addressing a desire to show progress toward reducing record federal deficits.
The president is proposing a levy of 15 basis points, or 15 percent, on the liabilities of large financial institutions. The tax, which officials are calling a "financial crisis responsibility fee," would apply only to financial companies with assets of more than $50 billion. Those firms -- estimated to amount to about 50 institutions -- would have to pay the fee even though many did not accept any taxpayer assistance and most others already paid back the government lent to them.
The administration expects that 60 percent of the revenue would come from the 10 largest firms. As proposed, the fee would go into effect June 30, 2010, and last at least 10 years.
Obama advisers believe the administration can make an argument that banks should tap their generous executive bonus pools for the fee instead of passing the cost on to consumers.
At issue is the net cost of TARP, the fund initiated by the Bush administration to help financial institutions get rid of toxic assets. The fund has since evolved, helping not only the banking sector, but also autos and homeowners.
Insurance conglomerate American International Group, the largest beneficiary with nearly $70 billion in bailouts, would have to pay the tax. But General Motors Co. and Chrysler Group LLC, whose $66 billion in government loans are not expected to be fully repaid, would not be subject to a tax.
Bankers did not hide their objections.
"Politics have overtaken the economics," said Scott Talbott, the chief lobbyist for the Financial Services Roundtable, a group representing large Wall Street institutions. "This is a punitive tax on companies that repaid TARP in full or never took TARP."
Jamie Dimon, chief executive of JPMorgan Chase & Co., speaking to reporters Wednesday before details of the tax were known, said: "Using tax policy to punish people is a bad idea."
"It would be very hard for the industry to pay for the auto companies," Dimon added. "I mean, at one point you have to be a little fair."
FOXNews.com - Obama to Bankers: 'We Want Our Money Back'
Listening to Obama speak about this--I have some questions:
While I agree that new banking regulations need to be made on Wall Street--to stop these boom & bust periods--why hasn't this administration & overwhelming democrat congress enacted new regulations?
Your comments?
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