Jan. 13 (Bloomberg) -- President Barack Obama will announce tomorrow his intention to impose a fee on roughly 20 of the country’s largest banks and financial institutions to help recoup taxpayer bailout money and trim the federal budget deficit.
Obama will outline his proposal to raise as much as $120 billion at 11:45 a.m. local time at the White House, Obama’s press secretary, Robert Gibbs, told reporters. Gibbs said the president’s economic team has worked on a structure to prevent the levy from being passed onto consumers.
The fees, expected to be spread over as many as 10 years, will be based on the leverage or amount of liability each firm has, according to an administration official, who spoke on the condition of anonymity.
The final cost of the fees will be based on total losses from the Troubled Asset Relief Program, which administration officials expect to drop from the current Treasury estimate of $120 billion. The White House declined to provide a list of banks that would be targeted.
The move may have a bigger political than fiscal impact. By including it in the budget message that he will send to Congress next month, the president is tapping into public anger over the bailouts of the financial and auto industries, executive bonuses as well as the deficit.
“The politics on this is really quite easy,” said Doug Elliott, a fellow at the Brookings Institution in Washington and a former managing director at JPMorgan Chase & Co. “The public would be supportive of anything up to shooting and burning the bankers.”
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