Two Iowans testified before Congress this morning. Iowa Senator Chuck Grassley asked the men to appear as part of a hearing on what Grassley calls a “bank tax.”
Grassley says the president proposes a fee on major financial institutions that would pay back “every dime” of the federal bailout of the financial industry. It’s sometimes called TARP — the Troubled Asset Relief Program. Grassley, a Republican, says he wants to ensure that money is returned to the taxpayers.
“I plan to ask the treasury secretary for a commitment from the administration that the president will veto any bill that contains a bank tax that isn’t dedicated to solely paying down the deficit,” Grassley says. “Otherwise, if taxes are simply raised for more spending, we haven’t accomplished anything but more taxing and spending. ‘Course, that’s business as usual here in Washington.”
John Sorenson of Des Moines, president of the Iowa Bankers Association, and Pat Baird, president and CEO of Aegon USA in Cedar Rapids, the nation’s fifth-largest insurance company were the two Iowans Grassley invited to be witnesses at today’s hearing.
“Both of these Iowans can offer Main Street perspective on how the bank tax or TARP (Troubled Asset Relief Program) tax could impact the community banks and life insurers who had nothing to do with the financial crisis that led to the TARP bailout,” Grassley says.
Grassley cites a Congressional Budget Office report. “The CBO said, and I quote from their report to me, the cost of the proposed fee would ultimately be borne to varying degrees by an institution’s customers,” Grassley says. “The customers would probably absorb some of the cost in the form of higher borrowing rates and other charges.”
Grassley also wants the treasury secretary to address concerns that General Motors paid back its initial TARP loan with money it got from a second TARP loan. Grassley says GM and Chrysler should be included under the bank tax as the auto industry bailouts accounts for $34 billion of the projected $109 billion in TARP losses.