Posted on 01/14/2010 11:43:23 AM PST by Sub-Driver
Press Releases Contact: Brendan Daly/Nadeam Elshami 202-226-7616 For Immediate Release 01/14/2010 Pelosi Statement on President Obama’s Proposed Financial Crisis Responsibility Fee
Washington, D.C. -- Speaker Nancy Pelosi issued the following statement today on the announcement by President Obama that he will propose a Financial Crisis Responsibility Fee that would require the largest and most highly leveraged Wall Street firms to pay back taxpayers for the federal assistance provided, so that the TARP program does not add to the deficit:
“Over the last two years, Congress has taken extraordinary actions to stem the tide of financial collapse and to guarantee that America’s families and businesses have access to the credit they need. In the TARP bill, Democrats insisted on fiscally responsible provisions that hold Wall Street accountable by requiring the financial industry to repay the taxpayer and recoup all TARP costs.
“Taxpayers must get their money back and the President’s bank fee proposal helps ensure that they will. The Financial Crisis Responsibility Fee specifically implements protections added by Congress to the TARP legislation, which were designed to ensure that the industry repaid taxpayers once these institutions regained their financial footing. The fee will also help discourage Wall Street from taking excessive risks at the expense of Main Street.
“In December, the House passed the Wall Street Reform and Consumer Protection Act – the most comprehensive reform of our nation’s financial system since the aftermath of the Great Depression. Wall Street Reform is founded on these same principles of fiscal responsibility – that the costs of any future failures by ‘too big to fail’ financial institutions would be covered not by the taxpayers, but by the financial industry. We will continue to take action to guarantee Americans don’t pay the price for others’ greed and help secure America’s financial future.”
This is Reform, Inc. please deposit your payment into the bag marked “Stimulus”
The bureaucracy-speak is nauseating, or should I say, "Leads One to Feel Like Spilling Protein on One's Shoes"?
As, I suspect, is Goebbels.
How exactly are the taxpayers getting "paid back" when the Federal Government taxes money away from the banks and deposits it into the Treasury - money that will in large part represent increased fees paid by tax-paying customers of those same banks?
This is beyond cynical, especially given how the banks got in trouble in the first place: by being alternately bribed and blackmailed by the Federal government into taking unconscionable risks.
Where is Perseus when you need him?
This is a back door tax increase. The Wall Streeters will just increase their fees to pay the government who will never return the money to us. Therefore, it’s a tax increase collected by Wall Street.
GM & Chrysler are not going to be paying money back-—soooooo the BANKS are suposed to pay back those monies?
The fees and costs are every bank in the country will go up—for the next 10 years?????
The next NObama voter I encounter, I will punch.
Fact Sheet: Financial Crisis Responsibility Fee
Financial Crisis Responsibility Fee
Today, the President announced his intention to propose a Financial Crisis Responsibility Fee that would require the largest and most highly levered Wall Street firms to pay back taxpayers for the extraordinary assistance provided so that the TARP program does not add to the deficit. The fee the President is proposing would:
Require the Financial Sector to Pay Back For the Extraordinary Benefits Received: Many of the largest financial firms contributed to the financial crisis through the risks they took, and all of the largest firms benefitted enormously from the extraordinary actions taken to stabilize the financial system. It is our responsibility to ensure that the taxpayer dollars that supported these actions are reimbursed by the financial sector so that the deficit is not increased.
Responsibility Fee Would Remain in Place for 10 Years or Longer if Necessary to Fully Pay Back TARP: The fee – which would go into effect on June 30, 2010 – would last at least 10 years. If the costs have not been recouped after 10 years, the fee would remain in place until they are paid back in full. In addition, the Treasury Department would be asked to report after five years on the effectiveness of the fee as well as its progress in repaying projected TARP losses.
Raise Up to $117 Billion to Repay Projected Cost of TARP: As a result of prudent management and the stabilization of the financial system, the expected cost of the TARP program has dropped dramatically. While the Administration projected a cost of $341 billion as recently as August, it now estimates, under very conservative assumptions, that the cost will be $117 billion--reflecting the $224 billion reduction in the expected cost to the deficit. The proposed fee is expected to raise $117 billion over about 12 years, and $90 billion over the next 10 years.
President Obama is Fulfilling His Commitment to Provide a Plan for Taxpayer Repayment Three Years Earlier Than Required: The EESA statute that created the TARP requires that by 2013 the President put forward a plan "that recoups from the financial industry an amount equal to the shortfall in order to ensure that the Troubled Asset Relief Program does not add to the deficit or national debt." The President has no intention of waiting that long. Instead, the President is fulfilling three years early his commitment to put forward a proposal that would – at a minimum – ensure that taxpayers are fully repaid for the support they provided.
Apply to the Largest and Most Highly Levered Firms: The fee the President is proposing would be levied on the debts of financial firms with more than $50 billion in consolidated assets, providing a deterrent against excessive leverage for the largest financial firms. By levying a fee on the liabilities of the largest firms – excluding FDIC-assessed deposits and insurance policy reserves, as appropriate – the Financial Crisis Responsibility Fee will place its heaviest burden on the largest firms that have taken on the most debt. Over sixty percent of revenues will most likely be paid by the 10 largest financial institutions.
How the Fee Would Work
While more complete details of the proposed Financial Crisis Responsibility Fee will be released in conjunction with the President's budget, the basic outline of the fee is as follows:
Levied on Only the Largest Financial Firms with the Most Leverage
Applied Only to Firms with More Than $50 Billion in Consolidated Assets: The fee would only be applied to firms with more than $50 billion in consolidated assets. No small or community bank would be covered by the fee. Fee Would Cover Banks and Thrifts, Insurance and Other Companies That Own Insured Depository Institutions, and Broker-Dealers: Covered institutions would include firms that were insured depository institutions, bank holding companies, thrift holding companies, insurance or other companies that owned insured depository institutions, or securities broker-dealers as of January 14, 2010, or that become one of these types of firms after January 14, 2010.
These institutions were recipients and/or indirect beneficiaries of aid provided through the TARP, the Temporary Liquidity Guarantee Program, and other programs that provided emergency assistance to limit the impact of the financial crisis.
Both Domestic Firms and U.S. Subsidiaries of Foreign Firms Subject to the Fee: The fee would cover the liabilities of all firms in these categories organized in the U.S. – including U.S. subsidiaries of foreign firms. Operations of U.S. subsidiaries of foreign firms in the areas cited above would be consolidated for the purposes of the $50 billion threshold and administration of the fee. For those firms headquartered in the U.S., the fee would cover all liabilities globally. The Administration will also work through the G-20 and the Financial Stability Board to encourage other major financial centers to adopt comparable approaches.
Fee Assessed at Approximately 15 Basis Points (0.15 Percent) of Covered Liabilities Per Year
How Liabilities Subject to the Fee Would Be Determined: Liabilities subject to the fee would be defined as: Covered Liabilities = Assets - Tier 1 capital - FDIC-assessed deposits (and/or insurance policy reserves, as appropriate)
Exempting FDIC-Assessed Deposits and Insurance Policy Reserves As Appropriate: The fee will exempt FDIC-assessed deposits because they are stable sources of funding covered by deposit insurance and already subject to assessment. Similarly, the base for the fee would be appropriately reduced based on insurance policy reserves.
How the Fee Would Be Assessed: Covered liabilities would be reported by regulators, but the fee would be collected by the IRS and revenues would be contributed to the general fund to reduce the deficit. The Administration will also work with Congress and regulatory agencies in order to design protections against avoidance by covered firms.
“Financial Crisis Responsibility”? Are Chris Dodd, Chuckie Schumer, and Barney Frank going to pay any part of it? Meanwhile, we continue to spend money we have to borrow like there’s no tomorrow.
“Over the last two years, Congress has taken extraordinary actions to stem the tide of financial collapse and to guarantee that America’s families and businesses have access to the credit they need”
They’ve done everything..except to jail Barney Frank and Chris Dodd.
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