The president is responding to "very real anger" from the American people and the ballooning budget deficit, former Federal Reserve chairman Paul Volcker said yesterday during a meeting of the Economic Club of New York, where Volcker was the featured speaker.
It's not unfair to say that big institutions that benefitted "one way or another from the bailout" should now "carry some of that burden and it's a question of how they do it," Volcker said.
"It's not an unreasonable response," he said. "He has to do something -- the law says he has to do something ."
Former Clinton economic adviser and Princeton professor Alan Blinder also emphasized the president's legal obligations.
"There's a congressional mandate to get back the money. It's not like one of the choices, if you obey the law, is to do nothing, so it becomes an issue of what's a better or worse way to do it," Blinder said in an interview at the Economic Club meeting.
Blinder noted that the tax is supposed to be based on the amount of risk a bank takes.
"I like the concept, but I worry about the practice," Blinder said, adding that he still had to review the details of the proposal.
With reports from ABC News' Alice Gomstyn and Matthew Jaffe.