Obama Pushes GOP to Side With Big, Bad Banks

Here's a hard political decision: Would you want to be seen as tough on the banks and financial institutions responsible for the collapse of the U.S. economy or be considered their patsy?

Michael Steele and the GOP are saying, "We're with stupid!" That is, they are lining up with the banks against President Obama, who on Thursday proposed assessing the biggest banks a "financial crisis responsibility fee" that would raise money to pay off the bailout bill.

Many financial institutions have indeed paid back TARP taxpayer money they received. But the government estimates that the unrecovered cost of TARP will be $117 billion, and according to the law that set up the bailout, the federal government is obligated to get that money back for the taxpayers. The new bank fee -- or tax -- would recoup this amount within 10 to 12 years, and then end. It will only hit banks with more that $50 billion in assets, and the White House says that the 10 largest financial firms will pay over 60 percent of this tax.

If your heart bleeds for the institutions that turned our economy into an incomprehensible casino and whose execs are now planning to dole out (to themselves) billions of dollars in bonuses, you might want to scream, "Hey, leave those banks alone!" Which is what Republican HQ is shouting. Before Obama officially announced the bank tax, the Republican Party zapped out a press release decrying the proposal. It noted that the several big banks have already sent the U.S. government checks for the TARP funds they received -- as if that settled the matter. And it denounced the proposed tax as "just another Obama scheme." In the press release, Steele and the gang didn't say how the taxpayers should be made whole, per the TARP law. They just slammed Obama.

Nothing could have delighted the Democrats more. At the White House daily press briefing, press secretary Robert Gibbs, with a grin, eagerly commented on the GOP opposition to the tax: "If you want to be on the side of big banks, this is a good country, you are free to do so." And the Democratic Party on Thursday afternoon sent out press releases overflowing with glee after Scott Brown, the Massachusetts Republican challenging Democrat Martha Coakley in the special election for Ted Kennedy's seat, told The Wall Street Journal that he's against the big bank tax. (Brown appears to be mounting an unexpectedly competitive campaign, and the Democrats are looking for any ammo to use against him before the election on Tuesday.) A Democratic Party e-mail to reporters had this headline: "Scott Brown takes side of Bankers over Middle Class undermining the populist sentiment fueling his campaign and central argument that he's not a lockstep Republican."

Could the Republican position on this tax cost the party what would be a stunning triumph -- winning Kennedy's seat?

With this tax, the Obama administration finally seems to be attempting to address popular anger with Wall Street -- and to harness that sentiment for political gain. Sure, Obama has decried excessive corporate bonuses, and he has supported creating a new Consumer Finance Protection Agency. But he has generally not been swinging hard on these fronts, as Congress has weakened financial reform legislation. Not too long ago in this column, I maintained that Obama had to be more of a fighter to fire up his base. And I recently appeared on Bill Moyers' PBS show to discuss why Washington -- including the Obama White House -- has not taken a fiercer approach regarding Wall Street.

But in announcing the bank tax, Obama did display a touch of anger:


That's not enough passion to ignite a populist wildfire. But it's a start. Especially when GOPers make it easy for Obama by investing their political fortunes with the villains of Wall Street.

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