For Immediate Release: January 19, 2010
Newberry Criticizes Obama Proposal to Punish Banks
Sen. Dan Newberry on Monday criticized President Barack Obama’s proposal of a 10-year tax on the country’s largest banks to cover a projected $117 billion shortfall in the federal government’s Financial Crisis Bailout Fund. Newberry said the proposal would be counterproductive to economic recovery.
The tax would be levied against approximately 50 of the nation’s largest financial institutions, regardless of whether they have received funds through the Troubled Asset Relief Program (TARP). Institutions which have already repaid TARP funds would also be subject to the new tax.
“This is a proposal that stands in defiance of commonly understood laws of economics,” said Newberry, R-Tulsa. “It’s foolish to think financial institutions can absorb a significant new federal levy without having to pass the expense on to consumers. The suggestion that a broader number of banks are responsible for the bad decision-making of a few large institutions is a poorly constructed argument intended to justify the extended arm of government control in the finance industry.”
TARP was initially created to help financial institutions rid themselves of toxic assets, but has since been extended to the auto industry and American homeowners. However, the newly proposed tax would only apply to the banking sector.
Newberry called the proposal an attempt to punish banks and provide cover for the federal government’s massive budget shortfall.
“The quickest and most prudent route to eliminating a shortfall is to curb frivolous spending,” Newberry said. “This is an irresponsible proposal that attempts to capitalize on a tenuous market recovery and threatens the ability of banks to lend to consumers. The proposal would not only punish firms that repaid TARP funds with interest but also firms that never accepted government assistance – it will slow market recovery and limit the availability of loans.”
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