U.S. cabinet members tend to lose their support the same way a person goes broke — slowly, then all at once. Timothy Geithner, the embattled U.S. Treasury secretary, still has President Obama’s confidence. Still, he has bled enough that this year could well be his last.
So says Larry Kudlow:
Think of this: The U.S. government bailed the banks out with TARP. Then the banks repaid TARP last year, including the stock warrants that provided a handsome taxpayer profit from the banks. And now the government wants to tax them? In other words, help the banks get healthy, and then punish them? I don’t understand it.
This compilation of opinion from the great Igor Volsky at the Wonk Room
– Ways and Means Chairman Charlie Rangel (D-NY): “Normally you’re just dealing with the Senate and they talk about 60 votes and you listen to them and cave in, but this is entirely different,” he said. “I’m telling you that never has 218 been so important to me in the House.”
My pal John Carney takes a crack at it:
1) Let’s start with the idea that we’re going to tax banks based on “riskiness.” How on earth do we expect the government to assess this? The government has an absolutely awful track record when it comes to assessing risk. Before the crisis, regulators put in place mandatory capital requirements that they believed were “risk weighted.” The result was the massive over-indulgence in risky mortgage backed securities that almost destroyed the financial system. A risk tax would just result in new pressure for banks to adopt the regulatory view of risk. No thanks.
That’s the DC buzz, that the WH will use bank tax to de facto pay for a 1-2 year extension of ALL the Bush tax cuts, including capital gains. The assumption was that the wealthier folks would be left out. But this would give Ds a tax cut to vote. With unemployment high and maybe going higher, Ds are scrambling for ideas.