Today Obama announced a new plan to recover the remaining dollars out there for the TARP bailouts that have not been repaid.
Instead of making the companies who actually took the money, and have not repaid it he wants to tax companies who have either repaid it or never even got TARP funds to begin with. To top it off the funds will be used to cover the missing money for companies the gov bought or are in union hands now (GM, Fannie/Freddie, Chrysler, etc).
No different than getting your credit card payment in mail, and then going and stealing your neighbors money to pay it off.
Im sorry but this is nothing but usual thug politics at work here. Pay off your union chronies, and then force other people to pay your debts. They make the mafia look like a bunch of school kids. Of course all in the name of economic certainty and making sure this doesnt happen again. Of course they don't expect this tax money to be passed onto the consumer, and its going to come from lower executive pay and decreased profits.
Foxnews.com
President Obama will propose fees of 15 basis points on so-called high-risk transactions of big banks and financial institutions who derive profits from trades in derivatives and other complex financial instruments.
A senior administration official said Obama's proposal is designed to take affect June 30 and run for at least ten years, and possibly longer if the fees do not cover unpaid sums from the Troubled Asset Relief Program.
Obama will call the new levy the "financial crisis responsibility fee."
The administration, through current Treasury Department accounting, estimates TARP is running a deficit $117 billion. Officials said that amount may shrink by billions and, even if the new transaction fees recoup all of the TARP-derived deficit, the administration intends to keep them on the books as a means to reduce the deficit and punish big-dollar firms.
Significantly, the administration will exempt GM, Chrsyler, Fannie Mae and Freddie Mac from the fees even though most of the current TARP deficit is linked to taxpayer bailouts of these firms.
"The goal of this proposal is to ensure that those major financial institutions who were the most significant contributors to the financial crisis, and who have been the most significant beneficiaries of the extraordinary public policy effort take responsibility to ensure that all of the costs of TARP are not added to the deficit or passed on to next generations through an increase in our national debt," said a top administration official who briefed reporters in the Obama proposal late Wednesday.
The fees would not apply to what regulators call Tier 1 capital (cash, disclosed reserves and assets subject to Federal Deposit Insurance Corporation assessments).
"What is left," the official said "is liabilities that are a proxy for your degree of leverage" –– in other words, investments in instruments such as derivatives, collateralized debt obligations or credit default swaps.
"We have already heard those expressing resistance to what is a legal responsibility to ensure that TARP is paid back," the official said, noting early industry hostility to the proposal. " But it is in many ways offensive for those at our major financial institutions to suggest that they can today afford excessive, often outlandish bonuses for their top executives, but cannot afford to make whole the taxpayers who put forward public policies that they have benefited from in an extraordinary measure."
The administration expects roughly 50 firms will be subject to the fees, which will only apply to banks, insurers and investment houses with assets in excess of $50 billion.
Officials said 35 firms will be U.S. companies and 10 to 15 will be the U.S. subsidiaries of foreign companies. The officials further estimated 20 to 27 firms will be U.S. banks. The range of companies includes: bank holding companies, thrift holding companies, insured depositories, insurance companies that own one of these types of entities; and broker-dealers of assets greater than $50 billion.
The administration ruled out applying these fees to GM and Chrsyler. The fees might be levied against Fannie Mae and Freddie Mac in the future.
"Fannie Mae and Freddie Mac, it's our view at this time in the extraordinary circumstances that they are under, it would not be productive for the taxpayer to apply this fee," the official said.
As for Detroit getting off scot-free, the senior official said: "The banks that are in question were significantly responsible for an enormous degree of the reckless risk-taking that was borne throughout the entire economy. The fee that is put forward here is in many ways a minimum –– a minimum of what is owed back for the rather significant costs that are borne in many aspects by the taxpayers."
Obama's proposal will arrive before Congree in its complete form when he presents his 2011 budget. Under TARP, the administration is not required to devise a plan to recoup unpaid taxpayer loans.
The White House says it's moving now to fill the deficit hole and assess fees on riskier investments its trying to discourage. It also justifies the fees as a sort of reverse insurance premium that compensates taxpayers for bailing them out for reckless investments that should have been regulated or never made in the first place.
"President Obama and Secretary Geithner feel strongly that there is no reason to wait," the official said. "And the President is taking responsibility to come forward three years early with such a proposal."
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Originally Posted by WGG
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