White House seeks new fees from banks, source says
By Michael D. Shear
The budget President Obama submits next month is likely to include fees on banks and other financial institutions as the White House seeks to demonstrate their eagerness to trim the federal deficit, an administration official said.
Such a fee would also continue the administration's attempts to recover the billions of dollars the federal treasury lent to the institutions during the financial crisis last year.
Key details remain unresolved, including the size of the fees and how to ensure that the fees are not simply passed along to bank customers.
Press Secretary Robert Gibbs declined today to discuss specifics about the president's budget after the idea of a fee was first reported on Politico's website. But Gibbs said Obama has long favored finding ways to make sure taxpayers are paid back.
"The president has talked on a number of occasions about insisting that the money the taxpayers put up ... is paid back in full," Gibbs said.
The idea of a fee on the nation's biggest banks could be a politically popular move, coming at a time when those same institutions are poised to offer tens of billions of dollars in bonuses to executives.
Obama tried to rein in bonuses at the banks which took large amounts of federal money, but many of those banks have now paid the U.S. Treasury back. Gibbs said that the size of the bonuses nonetheless offends the sensibilities of the president and the American people.
Gibbs called the bank executives: "Folks who continue to just not get it."
In that context, a fee could serve to bolster the administration's focus on "Main Street" concerns, and to emphasize the president's proposals to reform the financial system.
But it is not clear how a fee could be imposed without hurting the very people White House officials want to be seen trying to advocate for. Some officials have said they worry that a tax on financial transactions -- like a withdrawal or deposit -- could be too easily passed on to customers.
If the White House includes a fee in the budget, officials could attempt to portray it as a deficit-reduction measure. Obama is under pressure to demonstrate his conviction to slowing the growth of the nation's debt after record-breaking spending during his first year.
January 11, 2010; 1:52 PM ET
Categories: 44 The Obama Presidency
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