Why Tax Banks? That’s Where The Money Is.

by Reggie Oldak, Senior Counsel,
National Women's Law Center

President Obama today called for a “Fiscal Crisis Responsibility Fee” to be paid by about 50 of the largest financial institutions to “recover every single dime the American people are owed” for the bailout of Wall Street.

The proposed fee would be imposed on financial firms with more than $50 billion in assets. It would be in place for at least 10 years, longer if needed to pay back the Troubled Asset Relief Program (TARP) money provided to Wall Street during the recession. The fee is expected to raise $90 billion over 10 years; $117 billion – the projected cost of TARP – over about 12 years.

The statute that created the TARP requires that the President have a plan to recoup this money by 2013, to ensure that the program does not add to the deficit or national debt. He’s ahead of schedule by three years. 

The fee will require approval by Congress. Let’s hope those calling for fiscal discipline act quickly to shift the burden from struggling families to the large institutions that helped cause our economic crisis.