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US Public 'Will Pay Obama’s $90bn Bank Levy’
President Barack Obama's $90bn (£59.5bn) bank levy will largely be paid for by customers and investors and not the institutions themselves, the US's leading spending watchdog has found.
In a report on the White House's plan to impose a 0.15pc fee on liabilities of banks with more than $50bn in assets in order to recoup money lost through the $700bn Troubled Assets Relief Programme, the Congressional Budget Office (CBO) said the impact on banks would be "small".
Congressional Budget Office Director Douglas Elmendorf testifies before the Senate Budget Committee in Washington, DC. (AFP/Getty Images/File/Chip Somodevilla)
"The cost of the proposed fee would ultimately be borne to varying
degrees by an institution's customers, employees and investors, but the
precise incidence among those groups is uncertain," said the CBO in a
letter to Senator Charles Grassley, a leading member of the Senate finance
committee.
The CBO went on to say that customers could face higher rates for borrowing and increased charges, while investors could face lower share prices. It added that employees may receive less compensation as banks attempt to pass on the fee.
The levy, which has yet to be legislated for, was intended to make major banks - not taxpayers - pay for state assistance throughout the financial crisis.
Launching the plan in January , President Obama said: "I'd suggest you might want to consider simply meeting your responsibilities and I'd urge you to cover the costs of the rescue not by sticking it to your shareholders or your customers or fellow citizens with the bill, but by rolling back bonuses for top earners and executives."
The CBO also said the levy could also backfire by reducing the supply of credit. "Before this proposal moves forward, Congress needs to understand the consequences, good or bad," said Senator Grassley. "We need to make sure...[the] public don't get another raw deal."
42 Comments so far
Show All" President Obama said: "I'd suggest you might want to consider simply meeting your responsibilities and I'd urge you to cover the costs of the rescue not by sticking it to your shareholders or your customers or fellow citizens with the bill, but by rolling back bonuses for top earners and executives."
Sure Mr. Obama. I feel certain that the banksters are feeling pretty guilty right now for those big bonuses they got this year. I would say that these guys are chomping at the bit to show their gratitude to us lowly taxpayers. Why, I'll bet that as we speak, they are busy trying to figure out ways to tighten their belt so they can accept the financial responsibility they so strongly feel they need to exercise.
*SIGH*
And they aren't even using guns in this newest robbery.
The banksters are well aware that the pen is mightier than the sword, especially the pen that signs the checks to buy up government officials.
You my man are a man of few words; all correct.
oooh, he urged them. Next Waxman will write a harsh letter.
Along with a serious brow beating.
...and Conyers will hold a hearing....
Barakus Obombus, your recent appearance with Colin Powell was apparently a sign of something rather positive. We will get a real black and more progressive, less war mongering president in the 2012 election. Can you say President Powell? I'll bet by January 21, 2013 you can. Mr one term Obombus, it's going to be nice to know we can get a black Dwight D Eisenhower to replace a lousy excuse of a version Harry Truman pretending to be a black man, but being a water carrier for the rich white man.
AD
You want a war criminal to replace another? Colin Powell belongs on the Hague, not the White House. And speaking of being a water carrier for the rich white man, that's exactly what Powell was for the Bushes and Cheney for decades. By the way, he knew he was lying to the UN about Iraq's WMD in 2003.
Obama and Powell, two despicable Uncle Toms, embarrassments to the memories of MLK and Malcolm X.
AdathBey,
Thank you.
The ultra right should stop referring to Obama as a socialist. This man is 100% corporatist. How dare he and Bush give our treasury to the bankster/gangsters and now this? Why are Summers, Geitner, Paulson and Greenspan, Blankfein still walking the Streets? Why are they not being indicted. LOOK what these banksters have done to Iceland, Geece, Portugal and Spain. These PIGS have so corrupted Wall Street it should be banned and started over. Corrupt ole Chris Dodd agreed with Obama to put the Consumer Financial Protection Agency in Treasury (independent) with its own budget and director. Now, Dodd (looking for a lobbyist position after the Senate) now wants to put this office IN the Federal Reserve!!! The Federal Reserve has its own gang of bankster gangsters. Berancke refused to tell Congress what the hell he did with our money! Put these greedy freaks in jail....these are modern day robin hoods destroying america and the middles class.
Obama has a small cadre of Chicago thug insiders who are his decision makers. Rahm (the corporate slug from the Clinton regime), Axelrod who never met an inside deal he couldnt cash in on, Valerie Jarrett and Robert Gibbs. NONE of these insiders are experts on anything. They are his advisors advising him to go in the corporate direction rather than working for the people. We have been bamboozled, hoodwinked and our future is dim, our childrens even dimmer. The republicans are far worse. The American people need a Wake Up call...vote every one in office..OUT OF OFFICE.
Is anyone surprised by who'll be paying for this??? Of course the banks won't be paying a penny. The bigshots just sit in their big leather chairs and laugh at our stupidity. If enough people in all walks of life get screwed often enough by the banks, they might just gang together and bring the banks crashing down even if they are too big to fail.
Ellen Brown, who writes for counterpunch, and has a website, could be very helpful to you. North Dakota has a state bank -- the Bank of North Dakota -- and the state is doing well, for the most part. The state formed the bank in 1919. Ellen Brown's book is titled, Web of Debt, and I think that's the name of her website, too! In fact, she has been proposing this very idea from the beginning of the collapse.
I think you can search for her articles on www.counterpunch.org
I agree with you -- there has to be a way for us to get out of this -- with a little education and some good ideas, along with some perseverence -- if we have time.
How about this:
Don't become a bank, rob a bank. The police force is being cut. What an opportunity to order the out of work police to rob the bank.
What the Hell, the banks are robbing the population, the people might as well rob the banks, back.
With Bush, now Obamageddon, there is no law, no justice, and no peace.
Even when this administration does the right thing, it does it in the wrong way. Of course banks will pass this small fee on to customers. Banks aren't the ones who should be paying it.
The investment houses, hedge funds, and derivative brokers should be the ones paying the fee. They have no customers to pass the fee onto except each other. The fee would serve as a minor deterent to churning and excessive borrowing, and it would reap the Treasury three or four times as much as the fee on banks.
In addition to the new fee structure, any transaction involving "shorting" a U.S. company's stock should either be outlawed or the transaction should be taxed heavily to discourage such damaging activity.
Here's the deal:
The too-big-to-fail fuckstitutions (4 to 6) have 50% percent of the Mortgage Market; two-thirds of the Credit Card Market and 39% or more of all FDIC insured deposits. Let's not forget that "FDIC insured" is OUR taxpayer money doing the insuring!
"Congress needs to understand the consequences, good or bad," said Senator Grassley. "We need to make sure...[the] public don't get another raw deal."
Good for Grassley! Too bad he's the only one voicing the "raw deal" we have all been getting for decades, but more so now that our tax dollars bailed out these A$$holes in the $$Trillions while they reward themselves with $$Billions and get away with it. Grassley knows how pissed-off his constituents are. I have no doubt that many of them are members of the NRA and are preparing for a civil war in this country.
One raw deal after another don't make the unemployed public very happy.
James Quinn: "The CBO went on to say that customers could face higher rates for borrowing and increased charges, while investors could face lower share prices. It added that employees may receive less compensation as banks attempt to pass on the fee."
This statement sounds like corporate fear mongering to me.
Corporations always use the "we're going to pass through the cost to the customer" argument whenever the government threatens to add a regulation.
It seems to me that the banks (or any corporation) will charge whatever the market will bear for any product at any given time. I doubt seriously that this small fee is going to be noticeable on anybody's bottom line.
The corruption is so pervasive in the US right now, that nothing can be fixed.
The only answer is to declare anyone with wealth over one million dollars in excess, confiscate their houses and bank accounts, and return the money to the US Treasury.
Since corporations are persons too, this applies to them as well. They cannot have stakeholders over one million or it goes back to the government.
We are way past any semblance of Democracy or functional government.
It's time to wipe the slate clean and start over.
TJ
To fund WAR
Yeah, sounds like a great use of money.
Liberal retards, the government has enough money. The problem with taxing the rich more and more is the money ends up wasted on some pork( or just in the IRS's collection of it).
But please, keep thinking the government should seize all private property...That mentality's only caused 70-80 million deaths.( Stalin's mass murder and Mao's great leap forward)
keithsoulasa,
I am not a "liberal" you uneducated simpleton,
I am a Left-Libertarian. A Naderite. I advocate cutting the Federal Government down by 90 percent. But we still must return the trillions of stolen public money back to the US Treasury so that we can repair all the damage you NeoCons and Fake Democrats have done to my country.
Corporate Welfare has destroyed the United States of America.
Since you've obviously never had a college course in political science, beyond listing to right-wing "Rush the Druggie" on the Radio, allow me to educate you:
Left-libertarianism (sometimes synonymous with left-wing libertarianism and libertarian socialism[1][2]) is a term that has been used to describe several different libertarian political movements and theorists.
Left-libertarianism, as defended by contemporary theorists such as Peter Vallentyne, Hillel Steiner, and Michael Otsuka, is a doctrine that has a strong commitment to personal liberty and has an egalitarian view concerning natural resources, believing that it is illegitimate for anyone to claim private ownership of resources to the detriment of others.[3][4] Some left-libertarians of this type support some form of income redistribution on the grounds of a claim by each individual to be entitled to an equal share of natural resources.[4] Social anarchists, including Murray Bookchin[5], anarcho-communists[6] such as Peter Kropotkin and anarcho-collectivists such as Mikhail Bakunin, are sometimes called left-libertarian.[7] Noam Chomsky also refers to himself as a left libertarian.[8] The term is sometimes used synonymously with libertarian socialism[9] Left libertarian parties share with "traditional socialism a distrust of the market, of private investment, and of the achievement ethic, and a commitment to expansion of the welfare state."[10] It has also been used in self-description by geoists who support individuals paying rent to the community for the use of land.[citation needed]
In contrast, right libertarianism holds that there are no fair share constraints on use or appropriation.[11] Radical right libertarians hold that individuals have the power to appropriate unowned things by claiming them (usually by mixing their labor with them), and deny any other conditions or considerations are relevant. Thus they believe there is no justification for the state to redistribute resources to the needy or to overcome market failures.[12]
Differing from the above definition, some anarchists who support private ownership of resources and a free market call themselves left libertarian and also use a different definition for right libertarianism. These individuals include Roderick T. Long[13] and Samuel Edward Konkin III[14] Others, such as scholar David DeLeon, do not consider free-market private property anarchism to be on the left.[15] UNQUOTE
http://en.wikipedia.org/wiki/Left-libertarianism
But your Bi-Polar Brain is convinced that everything is either Left or Right on a simple-minded straight line. Libertarians, for your information, are neither left nor right as defined by the Nolan Chart:
http://en.wikipedia.org/wiki/Libertarianism
TJ
Well, he asked them nicely--the banks should cave to that.
So this bill will have a provision banning banks from charging account closing fees?
Well I don't know about the rest of you but I closed out my Citibank account last week when they told me I was going to have to pay for the privilege of keeping my money there. It was inconvenient and kind of a pain, but totally worth it. I highly recommend switching over. My new plan of attack, since writing to my congress people and senators doesn't seem to be working is: Don't support what you don't believe in. I bought into a food co-op, and I am banning myself from Starbucks, Walmart, and Target which is painful but I guess its the little changes that can make a big difference. I of course am not much of a consumer to begin with but I think if enough of us just say no to convenience and thus corporations, maybe we can be the change we want to see.
Maybe I am too idealistic coming out of university but I don't think that's a bad thing..
My biggest desire in the world right now is to not only see people withdrawing what little money they may have left away from these bank(robbers)...it's to personally kick Jamie Diamon, Lloyd BlankFIEND, et al in their tiny little self over-rated cajones repeated times.
Oh, but of course it takes a savvy businessman (per Mr. Harvard Constitutional Law Professionator hisself) to make a humongous profit when they can borrow money at ZERO percent interest from the "guvmint" (aka the Federal Reserve PRIVATE corp.) and then take that money and loan it back to the guvmint at 8% interest.
How for gawd's sake does one leap back through the lookinglass back into reality? The state of the nation is simply....errr, unreal. Interesting times? Absolutely.
This is the most heart-warming thing I've read in a while. If only Punkrocpixi were part of a huge groundswell, the impact could be awesome. Sadly, as a militant bocotter myself, I know only too well that these small actions, if they remain individual, are like the proverbial pimple on a pumpkin.
Punkrocpixi..i'm with you....i finally closed my Suntrust account this week and moved over to my local credit union, when i found out they paid their CEO $8m last year. I should have done it years ago, when the savings & loan i had my account with was bought by one bank, then another, then another. You should have seen the look on the face of the woman who closed out my account when i told her why i was doing so.
There IS a movement...go to http://moveyourmoney.info/ ..they have a search function where you can put in your zip code & find out about what local community banks are available for your business.
Yep, don't support what you don't believe in. Get on board everybone!
Punkrocpixi I totally agree with you. I have done the same thing and I feel great. Freedom at last. And by the way you are not idealistic you are realistic.
After all, this the poor bankers will have to face bigger ... bonuses, eh?
Chuck Grassley?
No one will work harder to protect the corrupt banks.
To portray him as an advocate for the public is like saying Dick Cheney is a community organizer.
Birdbrain Alley, The Telegraph is a conservative British paper.
President Obama sez: "I'd suggest you might want to consider simply meeting your responsibilities ..."
***
"Suggest"?
"Might"?
"Consider"?
Oooooh, them's fightin' words! I bet the banksters are quakin' in their Guccis now!
That, or the Teabaggers are right ... this "socialism" stuff is pretty lame.
Of course, you understand the USA is a mixed economy? We have both socialism and capitalism.
Our troubles are cause by the lack of effective regulation of capitalism, IMO.
Lame, Lame I ask you? How could 400 million Soviet Commies be wrong? Oh yea that's right they are gone.
Oh, Ok how about 1 billion screaming Chinese Red Commies? Oh yea that's right they are capitalist-commies now better at capitalism than us now.
Well how about 500 million Euroweenies....There you go see that socialism thing rocks! Oh I forgot they are more bankrupt than us.
Well anyway Cuba does a great socialism thingy, thing and they've got free healthcare.
What about all the money that's going to roll in/roll out for banks/investment companies when the baby boomers start cashing out their 401ks ... what's left of them. IMHO the 401k was one of the biggest con-jobs perpetrated on the American people. Privatization + deregulation = screwjob for the populace.
A lot of money has already been flowing to them(in the form of fees) and to the government(taxed as income and then the additional penalties for early withdrawal) from so many people having to access their 401ks just trying to survive. I'm not sure they're going to see such an influx of money as they did. Lots of companies have either nixed their matching contribution schemes or pared them down significantly.
What about the trillion dollars worth of unfunded pensions? Where is the money to fund them going to come from? Even though they are unfunded or underfunded, fees are still being paid out to the banks/investment companies.
I don't see much, if any, concern about any of this within our government or regulatory(?) bodies.
Next financial bubble to burst? Or am I just being paranoid?
Have you read Ellen Bown's recent article about Obama's "fiscal responsibility" push?
Well worth reading: ....http://www.webofdebt.com/articles/fiscal_responsibility.php....
Has Obama done anything since taking office other than backstab the American worker at each and every turn?
Could Cheney's 1st term have been any worse?
Three more years of this and we will be starting 'I miss Dick!' Chapters.
peacekeepertwo: International Action is needed to control, run away Capitalism.The WTO, gives Corporations the right to sue any governmemt that does not serve Corporate Capitalism.Break up the WTO.
Isn't this like being robbed, then having to pay the perp restitution?
Obabageddon strikes again.
Good grief...whatever happened to the financial transaction tax? All this convoluted regulatory BS just keeps them all fat and happy.
And everyone, keep moving your money. Other comments here indicate people are starting to get serious about this. I was surprised that local banks will reinvest CD interest and will allow a one-time increase in your rate if interest rates go up during the term of your CD.
Move your Money also makes clear that the big deal in banking is checking accounts.