Obama Weighs Tax On Big Banks
ROBERT SIEGEL, host:
From NPR News, this is ALL THINGS CONSIDERED. I'm Robert Siegel.
MELISSA BLOCK, host:
And I'm Melissa Block.
First this hour: politics and Wall Street. The Obama administration is considering a new tax on large banks. It could reduce the deficit and repay taxpayers for as much as $120 billion spent to bail out the banks. The tax would also allow the president to identify with a wave of populist anger at Wall Street, as NPR's national political correspondent Mara Liasson reports.
MARA LIASSON: The White House has yet to decide how the tax would be levied: on assets, profits or the riskiness of a bank's loans. But it certainly is timely, coming just as the administration is under increasing fire for being too cozy with Wall Street. Yesterday, White House Press Secretary Robert Gibbs said the president is intent on making taxpayers whole.
Mr. ROBERT GIBBS (White House Press Secretary): That's been the president's position. I think that's the least the taxpayers are owed.
LIASSON: Meanwhile, the FDIC is considering another proposal to make those U.S. banks, whose compensation plans encourage excessive risk taking, pay more for deposit insurance. The White House has also been trying, with little success, to scold big banks into scaling back their bonuses. Here's the president's top economist, Christina Romer, on CNN.
Dr. CHRISTINA ROMER (Chair, Council of Economic Advisers, White House): For heaven's sakes people, you know, it does seem really ridiculous. You would certainly think that the financial institutions that are now doing a little bit better would have some sense. And this big bonus season, of course, is going to offend the American people, it offends me.
LIASSON: The president on CBS has said it offends him, too.
President BARACK OBAMA: I did not run for office to be helping out a bunch of, you know, fat cat bankers on Wall Street.
Professor MICHAEL KAZIN (Historian): It struck me as something his advisers said you have to say something like this.
(Soundbite of laughter)
Prof. KAZIN: He doesn't seem comfortable when he's speaking in cliches.
LIASSON: That historian Michael Kazin, an expert on populism in America. We're in the midst of a populist moment, says Kaizen, that's causing problems for President Obama from two different directions.
Prof. KAZIN: What's happening right now is that both left and right are opposed to what they see as the sins of people in power. The right doesn't like what they see as increasing concentrations of power in government. The left doesn't like concentrated power in Wall Street and neither group is happy with Obama's response.
LIASSON: Part of the problem is being president. If the definition of populism is railing against elites - political, cultural or economic - the president by definition is the elitest guy around. And then there is Mr. Obama's personality.
Prof. KAZIN: He's a thoughtful, intellectual figure as we know. He's somebody who is not given to demagogy, and that is one of the reasons why he got elected I think. But those same traits are probably harming him politically right now.
LIASSON: It's also not so easy to craft populist policy. First of all, there is a limit to what the president can do about big Wall Street bonuses. Indeed, the White House has ruled out legislation on executive compensation. And experts say any tax on banks, no matter how it's levied, can probably be largely avoided by the banks and their armies of smart tax lawyers. But getting more money for taxpayers is just part of the purpose of a bank tax. It's also a political message, and Michael Kazin expects the president to keep looking for ways to send it again and again.
Prof. KAZIN: A lot about presidential populism is symbolic. Everyone now is talking about these obscene bonuses that the people on Wall Street are going to be getting this year. It's one thing the people care about and are right to care about. You know, he can talk about more about the gap between the better-off Americans and everybody else. It's sort of a soft class consciousness.
LIASSON: And while he's at it, President Obama can push legislation like the bank tax that might force Republicans to either vote with him or defend those fat cats on Wall Street.
Mara Liasson, NPR News, the White House.