Obama Preparing to Levy Tax on Banks to Cut Deficit

Targeting an industry whose political deafness has vexed his administration, President Barack Obama is weighing recovering tax dollars from government-rescued financial institutions with a levy.

The proposed levy could put Obama on the popular side of public opinion that is decidedly against Wall Street and angry over shortfalls in a $700 billion bank bailout fund.

A senior administration official said Monday that Obama would seek modifications to the law that sent billions in bailout money in 2008 and 2009 to a flailing Wall Street that was approaching collapse. The government official spoke on the condition of anonymity to discuss the president's thinking.

The idea received an early boost from Speaker Nancy Pelosi, the top Democrat in the House, where there have been calls for a hefty tax on bank bonuses.

"While we have not seen any specific language from the administration, Congress will certainly examine any serious proposals to lower the deficit and recoup even more of the TARP funds for the taxpayers," said Nadeam Elshami, a spokesman for Pelosi, D-Calif.

The 2008 law that created the Troubled Asset Relief Program requires the president to seek a way to recoup unrecovered TARP money from financial institutions, but five years after the law was enacted. It does not specify how the money should be recovered. - ABC News Story

First of all, if the law was created in 2008 then it has only been 2 years and not 5.

Second, what is this tax really going to do for us? Sure the Government will get more money to fund the cash for shoes or some other stupid program. I don't really foresee it cutting any deficit with the way they are spending money in Washington these days.

Lastly, this is just an all around bad idea. If you tax the banks do you really think this is going to affect their bonuses? My guess is no. They will raise fees and interest to recoup the money and improve their net so that they can still get their comfy bonuses. This is just another way Obama and the Dems will damage the economy even more.