Obama fee to hit top firms
Proposals draw flak from financial institutions as public anger grows
Washington : As many as 50 financial firms with assets greater than $50 billion (Dh183 billion) each would be hit by a levy President Barack Obama was set to announce late yesterday to help recoup taxpayer-bailout money and trim the federal budget deficit, an administration official said.
The levy would be based on bank liabilities and be imposed starting June 30 on companies such as Citigroup Inc., American International Group Inc. and Bank of America Corp. The administration estimates it will raise $90 billion over a minimum of 10 years, said the official, who briefed reporters on the condition of anonymity.
Approval
White House or Treasury officials contacted most of the companies affected, according to a senior administration official. The plan must be approved by Congress.
Obama plans to outline the proposal late this morning at the White House and a more detailed plan will be included in the budget message he's due to send Congress next month. The announcement comes as public anger is rising over the taxpayer bailouts of the financial and auto industries, Wall Street bonuses and the deficit, which hit $1.4 trillion last year.
White House senior adviser Valerie Jarrett said yesterday that the president is trying to recoup money given to the banks through the Troubled Asset Relief Program (TARP) now "because it's clear that the financial institutions have rebounded".
"He thinks it's fair, he thinks its equitable, he thinks it puts the responsibility on the financial institutions that were principally responsible for taking the risk that created the financial crisis and also the institutions that primarily benefited from the taxpayer loans," Jarrett said.
Even before it was formally released, the proposed Financial Crisis Responsibility Fee drew criticism from the industry.
"Using tax policy to punish people is a bad idea," JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon, 53, said after testifying on Wednesday at a hearing of the Financial Crisis Inquiry Commission in Washington.
