- James I. Clark III
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Obama Takes Big Banks to the Woodshed Over Bonuses
President Barack Obama is angry with the big Wall Street banks that took TARP dollars and plans to do something about it. “We want our money back and we’re going to get it,” Obama said in a White House speech when he proposed the Financial Crisis Responsibility Fee. “If these companies are in good enough shape to afford massive bonuses, they surely are in good enough shape to afford to pay back every penny to taxpayers.”
The President’s proposal – which requires Congressional approval – would apply to approximately 50 of the nation’s largest financial institutions and rake in $9 billion a year for at least a decade. Envisioned is an annual 0.15 percent fee on liabilities – except for insured deposits – and would be assessed on banks, insurance companies and financial firms with a minimum of $50 billion in assets. The objective is to counterbalance $117 billion in losses from TARP. The 10 largest financial firms would pay approximately 60 percent of the fee.
“My commitment is to recover every single dime the American people are owned,” according to the President. “And my determination to achieve this goal is only heightened when I see reports of massive profits and obscene bonuses at some of the very firms who owe their continued existence to the American people, folks who have not been made whole and who continue to face real hardship in this recession.”
Not surprisingly, banks were not pleased with President Obama’s proposal. “Two-thirds of the TARP investment from banks has already been repaid, with a large profit to the taxpayer,” countered Steve Bartlett, president of the industry trade group, the Financial Services Roundtable. “This tax is strictly political.”
Another viewpoint advanced is that banks that haven’t repaid TARP funds haven’t done so because they served the original intent of the program – they made loans to consumers and businesses.