With many clamoring for Wall Street's blood, bashing bankers is popular, particularly when the target is "big" bankers. Obama's proposed bank tax would ride this populist tiger by requiring "the Financial Sector to Pay Back For the Extraordinary Benefits Received."
Ok, how much was that, exactly? Less than you think: At its originally appropriated level of $700 billion, TARP always was small potatoes, spending wise--entitlements and interest are the core problems. And, bailouts under the Troubled Assets Relief Program (TARP) pay dividends, and the majority of "big" banks already repaid their TARP loans. So the current expected cost of TARP has shrunk below $100 billion:
source: Congressional Budget Office
Further, as the chart demonstrates, about half the TARP costs stem from the program's unwarranted expansion to include bailouts to GM and Chrysler, not banks. And the next largest piece is a product of the Making Home Affordable program, helping individual homeowners. AIG cost $9 billion--but AIG principally is an insurance company, not a bank.
Senator Obama voted to bailout banks. President Obama broadened the bailout well beyond banks. Then there's the $110 billion funded to prop-up Fannie and Freddie, government guaranteed lenders kept alive by politics, not policy.
Now the Administration says big banks are to blame. That's both a flip-flop and false.