Friday, February 17, 2012

Obama's Budget Calls for $61B from Banks

President Obama’s budget proposal continues to receive a barrage of criticism, especially from Republican lawmakers.

Obama specifically targets banks through a Financial Crisis Responsibility Fee, through which he intends to raise $61 billion from the nation’s largest banks.
The money is intended to “compensate the American people for the extraordinary assistance they provided to Wall Street, as well as to discourage excessive risk-taking,” according to the budget proposal.
A portion of the fees collected from the big-bank tax would be used to fund the mass refinance program outlined in the president’s State of the Union address. The fee would be assessed against firms with assets of more than $50 billion and would be paid over a 10-year period, starting next year.
“The Administration continues to actively implement ongoing Troubled Asset Relief Program (TARP) activities targeted to assist homeowners threatened by foreclosure, including unemployed homeowners and those with negative home equity,” Obama goes on to declare in the budget proposal.
He specifically mentions the $10 billion in savings brought to American homeowners through HAMP, although after
three years this program still falls short of its original goal of reaching 3 million to 4 million homeowners in its first two years.
As of December, about 910,000 loans had been permanently modified through HAMP.
The Financial Executives International, an industry organization for senior-level financial executives, released a statement this week expressing concerns about the budget’s increased taxes on American businesses and “American job creators.”
“Unfortunately, aspects of the President’s proposals to increase revenue would harm American job creators as well,” states the group’s president and CEO, Marie Hollein.
“FEI observes with concern that the budget proposes roughly $450 billion in tax increases on American businesses over the next 10 years,” states a press release from Financial Executives International.
House Budget Committee Chairman Rep. Paul Ryan (R-Wisconsin) has also been outspoken about Obama’s tax increases and calls attention to the budget’s net increase in spending.
“So we’re going to tax our most successful job creators, where most – more than half our jobs come from in America – at about 45 percent next year?” he asked on CNBC’s Kudlow Report.
Ryan says that while the budget may call for deficit reduction in some areas, overall it requires a net increase in spending.
Furthermore, he says the budget’s $1.9 trillion tax increases “will make it harder for businesses to create jobs and for workers to spur economic growth.”
Like other Republican congressmen, Ryan commented on the show, “This is really more of a campaign document than a credible fiscal solution to our big budget problems.”

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