Obama To Banks: 'We Want Our Money Back'
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From NPR News this is ALL THINGS CONSIDERED. I'm Melissa Block.
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And I'm Robert Siegel.
President Obama has announced a new tax on the country's biggest banks. It's designed to recoup the cost of the financial bailout for taxpayers. The tax or fee, as the administration is calling it, could generate up to $90 billion over 10 years.
But as NPR's Mara Liasson reports, it's already generating strong opposition from Republicans and the banks.
MARA LIASSON: In blistering populist language, President Obama said although most of the $700 billion in TARP money has been repaid, that's not good enough. He said he wants to recover every single dime the American people are owed.
President BARACK OBAMA: 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.
We want our money back and we're going to get it.
LIASSON: The tax, or what the White House calls the Financial Crisis Responsibility Fee, would be a 0.15 percent levy on the liabilities of the 50 largest financial institutions - only those with assets of $50 billion or more. And banks could be taxed whether or not they accepted TARP money or repaid it. Not surprisingly, the banks hate this idea.
Scott Talbott is the senior vice president for the Financial Services Roundtable.
Mr. SCOTT TALBOTT (Senior Vice President, Financial Services Roundtable): It's not a good idea to use a tax fee to punish people. The industry is resigned or is okay with paying the loss if there is one. But one: We don't know what that loss is yet; TARP is still active. And two: Banks are repaying their money with interest.
LIASSON: The TARP law requires that the White House come up with ways to recoup any loss and that's what the president's proposal is about. But in his remarks today he kept on coming back to bonuses. When the issue of those big, post-meltdown Wall Street paychecks first surfaced last spring, the White House seemed caught off guard. But today the president was full of populist rage. If these banks are in good enough shape to afford massive bonuses, he said, they're surely in good enough shape to pay back every penny to taxpayers.
Pres. OBAMA: And when we see reports of firms once again engaging in risky bets to reap quick rewards, when we see a return to compensation practices that seem not to reflect what the country has been through, all that looks like business as usual to me.
LIASSON: Republicans in Congress blasted the plan as a job-killing tax that would cripple the economy. The president said that was just twisted logic from Wall Street.
Pres. OBAMA: What I'd say to these executives is this: Instead of sending a phalanx of lobbyists to fight this proposal or employing an army of lawyers and accountants to help evade the fee, I suggest you might want to consider simply meeting your responsibilities. And I'd urge you to cover the costs of the rescue not by sticking it to your shareholders or your customers or fellow citizens with the bill but by rolling back bonuses for top earners and executives.
LIASSON: The White House has not ruled out targeting bonuses in the future. But for the moment, the president has chosen shame rather than a law to force a change in the banks' bonus system.
Scott Talbott of the Financial Services Roundtable thinks he knows the reason.
Mr. TALBOTT: I think politics have overtaken the economics of the situation here. I mean it is an election year so sort of all things are on the table.
LIASSON: The fee may, indeed, be good politics at a time when anger at Wall Street is running high and it's expected to receive widespread support in Congress among Democrats and maybe even some Republicans who don't want to be on the wrong side of voters' fury this year.
Mara Liasson, NPR News, the White House.
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