Financial Privacy & Security News

WASHINGTON, Jan. 14 – The “Financial Crisis Responsibility Fee” announced by President Barack Obama earlier today is a good first step toward paying taxpayers back for the money lent out under the Troubled Asset Relief Program (TARP). 

“The President should be applauded for taking these steps to make taxpayers whole,” U.S. PIRG Tax and Budget Reform Advocate Nicole Tichon noted. “But the banks got a lot more than $700 billion.” According to CNN, taxpayers have spent $3 trillion fixing the financial mess, with the Federal Reserve spending $1.5 trillion to date. 

“The $90 billion the administration projects the fee will raise over ten years represents a solid beginning, but only a beginning toward recouping the taxpayer cash that flowed out of various government coffers and into the vaults of big banks,” Tichon continued.

“For instance, the $90 billion represents six percent of the $1.5 trillion that the Federal Reserve chipped in to fix Wall Street,” Tichon noted.

“And all the taxpayer support worked – for the banking industry.” In fact, Wall Street and the big banks are expected to award themselves bonuses totaling at least $150 billion for 2009, according to calculations by the Americans for Financial Reform coalition.

U.S. PIRG’s Tichon today argued that “before the big banks get back to their business-as-usual big bonus pay days, they should be required to pay back the taxpayers in total – a debt that far exceeds the $700 billion in TARP dollars. Banks could start by paying back all of the other backstops, sweetheart loans, and capital infusions.”  

If the top banks took their yearly $150 billion in bonuses, and applied it back to their debt for ten years – they could cover the Fed’s $1.5 trillion bill.

“Taxpayers stand to gain from the President’s action today. We should all urge him and the Department of Treasury to continue efforts to recoup ‘every single dime’ and counter Wall Street’s desire to put bonuses ahead of bailouts,” Tichon concluded.

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U.S. PIRG, the federation of state Public Interest Research Groups, is a non-profit, non-partisan public interest advocacy organization. For more information on U.S. PIRG’s campaign on Reining in Wall Street click here. For more information on U.S. PIRG’s campaign on Challenging the Bailout click here.
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