Obama wants financial institutions to pay for auto bailout losses

In an attempt to recoup the government’s investment in the financial and auto industries, President Barack Obama seeks to levy a fee on approximately 50 of the largest financial institutions with $50 billion or more in assets, to repay taxpayers for the costs of bailing out the banks and automakers. The kicker though, Β is that no such fees will be imposed on the automakers that were bailed out; the banks will be expected to shoulder the $30.4 billion lost on the auto bailout.

Auto-lender GMAC will be one of the 50 financial institutions covered.

“My commitment is to recover every single dime the American people are owed,” President Barack Obama said today. “And my determination to achieve this goal is only heightened when I see reports of massive profits and obscene bonuses at the very firms who owe their continued existence to the American people, who have not been made whole, and who continue to face real hardship in this recession.”

The White House based the defense of its decision to not impose the fee on the automakers on the fact that since the fee would be levied based on assets, it would not be workable in the case of the auto makers.

The administration has said that, “the situation with autos is a difficult and special case”Β¦we just simply do not feel that in the case of the auto industry that this was a workable fee for them and that you could not have something that covered each and every firm that might have benefited.”

Republicans by and large are opposed to the plan, as they see it as nothing more than another tax on the American public. They see the tax as punitive considering that the banks have already paid back their monies, and that it will discourage job creation at an already horrible economic time.

– By: Stephen Calogera
Photo Credit: White House Flickr

Source: Detroit News