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Wed, Jan 13, 2010 - Page 10 News List

Obama considers bank fee to recoup rescue plan dollars

AFP , WASHINGTON

US President Barack Obama is considering imposing a fee on banks to help recoup taxpayers’ dollars used rescuing the finance and auto sectors at the height of the economic crisis, an official said on Monday.

Suggestions that banks and finance firms could be hit by such a levy came as Wall Street gears up to announce huge bonus payouts to top executives while the rest of the US remains mired in economic woe and high unemployment.

“The president has made a commitment to the American people that he will recoup their investment in the financial industry,” a senior Obama administration official said on condition of anonymity on Monday.

“While we have made great progress in recouping a large portion of the investment, consistent with the law, the president will propose a way to recoup additional funds and one of the options is a levy on financial institutions,” the official said.

White House spokesman Robert Gibbs earlier said Obama was committed to ensuring tax payers get repaid for the billions of dollars of support given to finance firms, but would not go into specifics.

“I simply would say that the president has talked on a number of occasions about ensuring that the money that taxpayers put up to rescue our financial system is paid back in full,” Gibbs said.

“That’s been the president’s position. I think that’s the least that taxpayers are owed,” he said.

The Obama administration has repeatedly said it will try to recoup the full cost of the US$700 billion Troubled Asset Relief Program (TARP).

A bank fee may also be one way the White House could channel public anger over big bonus payments on Wall Street, as Americans face the reality of 10 percent unemployment and a slow economic recovery.

“I think you’ve heard the president throughout the past year, talk about the continued divergence from in all ways reality of what’s going on Main Street and what’s going on in some of these firms on Wall Street,” Gibbs said.

A Treasury report to Congress published on Monday said the government had committed US$545 billion in TARP funds as of last Wednesday.

Of that figure, US$372 billion have been disbursed, out of which US$165.18 billion has already been repaid by banks, leaving US$209 billion outstanding.

With the bonuses issue likely to explode into political controversy later in the week, the US government made clear however on Monday it had no intention of imposing a one-off 2009 tax on individual bankers bonuses.

Asked if the US was planning to follow moves this week by Britain and France for “community” taxes on bankers bonuses, Treasury spokeswoman Meg Reilly said in an e-mail: “Not at this time.”

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