Obama Budget Would Double Bank Tax Size

Obama Budget Would Double Bank Tax Size

President Obama speaks on his 2013 budget to students at Northern Virginia Community College in Annandale, Va. (JEWEL SAMAD - AFP/GETTY IMAGES) President Obama's budget plan calls for a bank tax twice as big as the one he proposed last year, a further sign he wants to make anti-Wall Street sentiment a major part of his re-election campaign.

The bank tax, also known as the "Financial Crisis Responsibility Fee," first appeared in Obama's 2011 budget and was projected to raise $90 billion over 10 years. A year later, in the wake of the mid-term elections and accusations from executives that Obama was "anti-business," the White House cut the proposal by two-thirds to just $30 billion.

In this year's budget, the bank tax is back up to $61 billion. The plan states: "Many of the largest financial firms contributed to the financial crisis through the risks they took, and all of the largest firms benefited enormously from the extraordinary actions taken to stabilize the financial system. The Budget asks these firms to compensate Americans for benefits they received from these actions and to recoup TARP costs."

As the Occupy Wall Street protests started heating up last year, Obama's aides began thinking of ways to harness the anger against Wall Street for the re-election campaign -- especially if Mitt Romney, with his background in private equity, winds up being the Republican nominee.

The bank tax targets financial firms with more than $50 billion in assets.

The tax would also help pay for Obama's mortgage refinancing program, according to the budget.

The reason for the increase in the fees, according to an administration official, is that the expected cost of the rescue of the financial system has increased in the past year. The crisis fees are linked to that amount. Read more.