The Senate Finance Committee held the first of a series of hearings on the Obama administration’s proposal to tax financial institutions in order to recoup losses from the Troubled Asset Relief Program.
“The TARP legislation anticipated that there might be losses,” said chairman Max Baucus, D-Mont., in his opening statement at Tuesday’s hearing. “Congress anticipated that the banks might pay back something less than all of the TARP money. The most recent estimates anticipate that the Treasury will end up losing about $89 billion. We need to think about how we are going to get that money back on behalf of American taxpayers.”
President Obama proposed a bank fee in January to recover the TARP losses. The fee is estimated to raise $90 billion over 10 years and would apply to about the 50 largest financial institutions in the country. However, Baucus noted that such a tax needs to be approached cautiously.