Wall Street vs. Obama: Big Bank Tax Under Attack

President Barack ObamaWhile President Obama blasted major banks in his radio address for mobilizing to stop his fee on financial firms with $50 billion in assets, a top lobby group for Wall Street was doing just that, a media report says.
The Securities Industry and Financial Markets Association (SIFMA), the top lobbying group for financial markets participants, is currently considering challenging the constitutionality of Obama’s Financial Crisis Responsibility Fee, according to a report in the New York Times.
An email from SIFMA to the heads of Wall Street’s legal departments said the tax “would unfairly single out and penalize big banks,” the Times reported. The message also said the association has hired attorneys with vast experience in arguing cases before the Supreme Court, the Times said.
Opposition to Obama’s fee is mounting, primarily from Republicans and the banking industry. They contend the fee is unfair and the costs would be passed onto consumers at the worse possible time – during a slow economic recovery and still-tight lending policies.
Reports say the fee could cost institutions such as JPMorgan Chase – the nation’s top credit card issuer – and Bank of America – the top lender – more than $1.5 billion each.
Although most major banks have repaid their bailouts from the  government, under the Troubled Asset Relief Program (TARP), Obama said the financial firms have acted irresponsibly in handing out lavish bonuses. The Obama Administration projects the tax could raise up to $117 billion over the next 10 years.
“Those who oppose this fee say the banks can’t afford to pay back the American people without passing on the costs to their shareholders and customers,” Obama said in his radio address this weekend. “But that’s hard to believe when there are reports that Wall Street is going to hand out more money in bonuses and compensation just this year than the cost of this fee over the next ten years.  If the big financial firms can afford massive bonuses, they can afford to pay back the American people.”
The President has been accused of making a populist move with the bank fee. Bruce Foerster, a former executive at Lehman Brothers Holdings, who is now president of South Beach Capital Markets in Miami, spared no punches in his criticism.
“It’s not a good use of the president’s time to demonize banks or investment banks or hedge funds or any financial institution,” Foerster told Bloomberg. “Trying to exact this last piece of flesh from the banks is the act of a politician, not the act of the president of the United States.”

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