WASHINGTON - President Barack Obama told banks Thursday they should pay a new tax to recoup the cost of bailing out foundering firms at the height of the financial crisis. "We want our money back," he said.
In a brief appearance with advisers at the White House, Obama branded the latest round of bank bonuses as "obscene." But he said his goal was to prevent such excesses in the future, not to punish banks for past behavior.
The tax, which would require congressional approval, would last at least 10 years and generate about $90 billion over the decade, according to administration estimates. "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.
Advisers believe the administration can make an argument that banks should tap their bonus pools for the fee instead of passing the cost on to consumers. The proposed 0.15 percent tax on the liabilities of large financial institutions would apply only to those companies with assets of more than $50 billion - a group estimated at about 50.
Administration officials estimate that 60 percent of the revenue would come from the 10 biggest ones. They would have to pay up even though many did not accept any taxpayer assistance and most that did have repaid the infusions.
Obama said big banks had acted irresponsibly, taken reckless risk for short-term profits and plunged into a crisis of their own making. Bankers did not hide their objections.
"Politics have overtaken the economics," said Scott Talbott, chief lobbyist for the Financial Services Roundtable, which represents large Wall Street institutions. "This is a punitive tax on companies that repaid TARP [Troubled Asset Relief Program] in full or never took TARP."