Yesterday morning President Obama floated the notion of charging banks a fee to recover some of the $700 billion the government has spent on bank bailouts over the past two years. The fee is due to be included in the 2011 fiscal budget the President will submit to Congress in February. According to a Bloomberg interview with an unnamed administration official, the President expects to raise about $120 billion, the amount the Treasury Department estimates it will lose from the Troubled Asset Relief Program.
But the un-fleshed-out idea raises several questions, such as, won't the banks just pass whatever fees they're charged on to their customers?
Dylan Ratigan spoke to Rahm Emanuel, White House's chief of staff and a former Wall Street executive, a Reuters reporter and Arianna Huffington about whether or not the Administration will actually impose a fee on banks. The overall consensus was that a bank fee will not take place. Huffington promoted her campaign for getting consumers to move their money from large banks to small ones:
And Suze Orman strongly made the case that a bank fee would only hurt bank customers in an appearance on msnbc's Morning Joe show: