During last night’s State of the Union address, President Obama defended the government’s steps to shore up the banking system — particularly the Troubled Asset Relief Program (TARP) — calling them “necessary,” but “about as popular as a root canal.” He then emphasized his intention to implement a fee on the banks aimed at recouping all of the money spent on TARP:
I supported the last administration’s efforts to create the financial rescue program. And when we took the program over, we made it more transparent and accountable. As a result, the markets are now stabilized, and we have recovered most of the money we spent on the banks. To recover the rest, I have proposed a fee on the biggest banks. I know Wall Street isn’t keen on this idea, but if these firms can afford to hand out big bonuses again, they can afford a modest fee to pay back the taxpayers who rescued them in their time of need.
Notably, the Republicans did not join the Democrats in applauding the notion that banks ante up for the full cost of the bailout. Watch it:
As the New York Times’ Gail Collins wrote, “of course, everybody hates the bankers, except the Republicans who sat on their hands when the president called for taxing them.” And the GOP has made no qualms about its intention to oppose the bank fee, citing the usual argument that a modest fee on banks who can afford to pay billions in bonuses will somehow lead to crushing job loss.
In addition to withholding applause, House Republicans are actively working with the U.S. Chamber of Commerce to kill the tax outright. As Ryan Grim reported, Rep. Peter King (R-NY) is attempting to gin up signatories to a letter opposing the bailout tax, which he intends to send to Obama. And King “splashes in bold across the top of the letter: ‘The U.S. Chamber of Commerce strongly supports this effort.'” The Chamber spent a whopping $123 million on lobbying efforts in 2009, including $71.1 million in the last three months of the year.
There are plenty of good economic reasons for the tax, including that it acts as a small payment for all of the subsidies which the big banks have taken advantage of over the past year outside of direct TARP funds. And if the large banks do attempt to pass the cost of the fee onto consumers, which Republicans continually claim they will, that’s all the more reason for consumers to find a smaller institution like a community bank or a credit union with which to do business. As James Kwak wrote, the fee is “simply sound regulatory policy (though, again, too small).”
Of course, the Chamber doesn’t support placing any limit on any industry, even when that industry brought the economy to the brink of collapse. And the GOP’s joining with it shows that the party has the same aversion to common sense measures.