Obama Announces Big Bank Fee

A financial crisis responsibility tax would be levied on roughly 50 big banks.

ByABC News
January 14, 2010, 2:37 PM

WASHINGTON <br/> Jan. 14, 2010 &#151; -- After days of speculation, the president today confirmed reports that the government will seek to recoup losses from its massive financial system bailout by proposing a new tax on major banks.

"We want our money back, and we're going to get it," President Obama said sternly this afternoon at the White House.

What the government calls a financial crisis responsibility fee would be levied on roughly 50 banks with assets of $50 billion or more. The goal is to raise at least $90 billion over the next 10 years.

The announcement comes as politicians and critics wring their hands over news that the country's top five financial institutions -- Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase and Morgan Stanley -- have allocated roughly $90 billion for overall compensation, with bonuses comprising more than half that figure.

"If these companies are in good enough shape to afford massive bonuses, they are surely in good enough shape to afford paying back every penny to taxpayers," Obama said.

The administration estimates taxpayers will be on the hook for $117 billion of the $700 billion they loaned through the bank bailout, the Troubled Asset Relief Program.

Wall Street's biggest banks have repaid the loans with interest, and some argue that taxing them now would be unfair.

"I think using tax policy to punish people is a bad idea," JPMorgan CEO Jamie Dimon told ABC News Wednesday. " I also think it's very hard to have the industry pay for, you know, the auto companies. At one point you've got to be a little fair."

But Obama showed little sympathy for the argument that taxing the banks is unfair.

"My commitment is to recover every single dime the American people are owed," the president said, adding that his determination to achieve this goal was only heightened by 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."

U.S. Treasury Secretary Timothy Geithner echoed some of the president's statements later today.

"We thought it was economically sensible, fair, good policy, legally necessary to propose now how to make sure that the costs of this are not born by people who were innocent victims of all the wreckage," he told CNBC.