New York (CNNMoney.com) - The White House is considering a tax on financial institutions to ensure that taxpayers who bailed out banks get paid back, a senior administration official said Monday.
The law that created the $700 billion Troubled Asset Relief Program empowered the president to ask Congress to recoup money if bailouts were not paid back in full.
TARP dictates that the Office of Management and Budget consider such action five years after TARP went into effect in October 2008 to prevent the federal bailout from adding to the deficit.
When the TARP bill was hastily debated, the provision was key to winning enough support from wary lawmakers to push the bill through Congress.
Robert Gibbs, the White House press secretary, would not discuss how a possible bank fee would fit into Obama's fiscal year 2011 budget, which is set to be released next month. "When it comes back from Kinko's, we'll be able to talk about it," he said.
But Gibbs said it is the president's "goal" to ensure the "money that taxpayers put up will be paid back in full."
The banks will only pass the tax forward.
How many times does this adm. need to be told companies just
pass tax on to consumers and/or cut back on operating expense.
This is not a R or D issue it is a US issue.
Could the government please cut spending across the board,
recall the left over 797 billion and cancel TARP and put the payments
toward paying down the 12 trillion bill.
This bill is a great idea. Tax the banks 30% if they are late on their payments. lol
Great! And lets stay with reality...when you tax them who do you think the costs are passed down to....Main Street America....tell me again who benifits?
will just be passed on to the consumer, great idea obama...
Does this include the Bailout we gave the Auto Industry? Or are the Unions still the un-touchables?
I think this is a good idea by the President; the banks thought they were untouchable. Well, after this goes through, they will realize that they are not so untouchable after all. I am also shocked by the comments here saying this is a bad idea; if you read history, FDR did the same thing as part of his New Deal legislation. It is called financial regulation; that means holding them accountable for their actions, and treating everyone, even you, fairly. I am also aware that when you dare to tax these big banks, they like to pass it on to the customer. I like for the banks to look at what President Obama has in store for financial regulation: 1. Policing financial giants: 2. Filling the gaps: 3. Consumer protection: 4. Secure securitization: 5. Political considerations: 6. Potential Snags: 7. Congressional Outlook:
So, if those big banks have any thoughts about thinking if they are the untouchable giants, I encourage them to read the layout of those seven areas, then they will think otherwise. The senate just needs to get over itself and pass financial regulation.
Will that apply to the loans that Geitner told AIG to keep quite about....and then we paid 100% for them instead of pennies on a dollar.
This only benefits the banks and hurts consumers of the banks that used TARP funds. The banks required to pay back TARP will just increase fees to consumers, resulting in the following outcomes: (1) Consumers will pull their money from a TARP bank and go to a more "stable" bank, (2) banks losing customers go back with their bowl and ask the politicians, "Please sir, may I have some more?," (3) Banks work together to collude on raising fees, meaning all consumers get stuck with the tab, essentially resulting in higher prices at the bank and in the tax return, (4) as voters we get upset enough to finally oust all incumbants, regardless of party, because both sides were wrong in this deal.
I agree with "Moderate." Just use existing bank policies on default loans. Begin foreclosure, but not just of bank property, but include the private property of bank executives.
Also, tax their excess bonuses as well.
In fact make them work for free until the economy is completely recovered were everyone has a job.
Great idea from an intelligent White House, tired of self-serving bank reps. And if you REALLY believe in capitalism, then the logical consequence of banks failing to manage their money, failing to use good judgement in their investments and continuing to payout large bonus for a job NOT well done....than you should move your money to another institution. Take your savings and put them in a local bank that chose to not participate in the housing meltdown. If enough consumers who still have money would stay away from those bankers who supported zero-down, interest-only, even if you have bad credit home mortgages, a powerful message would be sent to those who received large bonuses as so many others lost their homes.
also it is funny to me that they want to recoup the money owed to the american people but then when they get it they want to squander it on a worthless democratic conception of a "JOBS BILL or a "GOVERNMENT GIVEAWAY" like cash of clunkers, cash for caulkers, money for votes, or illegal alien housing and benefits...... no thanks
Ready, set, ignore this: conservatives are the ones who insisted on insertion of this provision into the legislation. You want to complain about it to someone?? Call your local conservative representative.
Another tax increase!! Democrats never met a tax hike they didn't like. May sound good on the surface, but guess who ultimately pays the price.................the consumer. This is Obamas sneaky way of raising taxes on us average Joes.
What about the money Obummie is stealing from TARP to do some more socialist programs? The banks will pay back what they were forced to take,in some cases, but keep your hand out of the cookie jar Obummie. It's not your money!!!!
The bill signed into law says 5 years after 2008 – which makes it 2013... so why is this news now at the start of 2010? And what happens to recoup the money Obama handed out to the car companies and then said they didn't have to ever return?
And what happens to the big banks who lose out in trying to recover with the likes of the campaign of the Huffington Post who are leading a campaign to have people withdraw all their money and put it into smaller hometown banks? Are liberals trying to ensure larger banks fail and therefore can't repay the money they owe?
I can't believe the government wasted all these billions of dollars and have no clear ways to get the money back. Try this! Try this! Come on, I expect, government officials to be smarter than me that is why they were hired / voted to do the RIGHT job.
The president is wasting tax payers money with no clear senses of how to get money back but jus assurances from his czar. Please Mr. Barack Hussein Obama - be our president and stop playing with our tax dollars. Be a president for once now that you have a 1 year of experience and stop relying on your czar that knows nothing by politics and corruption.
im actually getting a BiGGER bonus this year!!!! thank you tax payers I laugh at those who believe anything the president says. How you poor people doing? they do anything for you yet?
Wow, those GOP memory pills really work because everyone on here forgot that the Bush admin is responsible for this and McCain stopped his campaign to work on this.
But of course you forgot, your children who broke the fine china but complains that it's not being glued up the way you want.
We stopped listening. Time to ferberize the GOP
So banks who didn't request or receive taxpayer money will be forced to poney up money to repay the debt of banks that shouldn't have been given taxpayer money to begin with.
Talk about ruining an economy, these clowns are clueless.
I just hope that the money which is repaid finds its way back to the treasury without getting "skimmed" for other ineffective projects. But not likely.
Got to love the logic of all you Obama supporters! Someday you will realize that all these taxes to recoup TARP, taxes on corporations and even corporate health care taxes will come out of your pocket. It all comes from those of us who pay taxes one way or the other. The taxes also take away jobs. It is time you all take some economic 101 classes!
Like I've said before, If Obama walked on water, the haters would complain about his shoes.
"Obama Walks on Water. Republicans Outraged, Claim Shoes too Flashy. 50 Teabaggers March on DC."
I don't know if the Democrats personal banker, Goldman Sachs, is going to be OK with this one... Obama better call all the bankers back to DC (well, at least the ones that feel like showing up) and clear this with them...
Also, can someone please tell me how Timothy Geithner has been able to keep his job? He clearly knew how AIG was going to disburse it's TARP funds and was still asking AIG NOT to disclose certain terms of it's bailout to the public! In the end GS got $13B, BOA $5B and Citi got around $2B... this "Mr. Geithner wasn't part of thise discussions" crap is just that, crap.
Socialism – They want to control everything, and tax everything, we are becoming slaves of the government.
You people kill me! No one wants to pay taxes anymore for anything, but we need roads, bridges, parks, schools, policeman, fireman, it's sad that in the last 40 years it went from "Ask not what your country can do for you but what you can do for your country" Now all we here is "What is in it for me, and why should I pay for it" Americans are stupid, fat and lazy!!!!!