Obama Pushing Tax on Big Banks to Pay for Bailouts
Credit unions and community banks wouldn't be subject to a fee on financial institutions proposed today by President Obama and aimed at recovering some of the costs for the rescue of the financial system.
Obama's proposal, which is likely to be included in the budget he is scheduled to send to Congress next month, would be a 0.15% levy on the liabilities of financial companies with assets greater than $50 billion.
The levy, which would be called an "economic responsibility fee,'' would last for 10 years. The Obama administration projects that the fee, which would not apply to core capital or to deposits insured by the FDIC, will raise approximately $90 billion over 10 years.
Congress would have to approve the fee as part of the budget process. Key Democrats, including Senate Banking Committee Chairman Christopher Dodd (D-Conn.) and House Financial Services Committee Chairman Barney Frank (D-Mass.), endorsed the proposal. But several Republicans oppose the proposal and said it would deter these financial institutions from making additional loans.