by Jules Witcover

President Obama's return from his Hawaii holiday vacation has been a splash of cold water pulling him back to the reality of his immense responsibilities.

Already faced with the task of dragging the Democratic-controlled Congress across the finish line in his first-year struggle to enact sweeping health-care insurance reform, the shattering earthquake in Haiti has heaped more woe on his plate.

As news of its horrendous human cost filled America's airwaves, Obama was engaged in intensive discussions with House Speaker Nancy Pelosi, Senate Majority Leader Harry Reid and other key congressional Democrats on patching together the passed House and Senate versions.

Aware that polls indicate slipping public support as the Republican leaders work to derail the emerging bill, Obama has conspicuously dropped his earlier aloofness and jumped in. He wants a package he can tout in his approaching annual State of the Union address.

But the earthquake in Haiti has obliged him shuttle in and out of such deliberations to oversee the emergency American response to the tragedy in Haiti. At the same time, Secretary of State Hillary Clinton canceled a planned trip to New Guinea, New Zealand and Australia and returned to Washington to help cope with the natural disaster.

Meanwhile, on Thursday the White House proposed a new tax on major banks, considering a new round of executive bonuses. Last year many banks that received huge federal bailouts nonetheless gave out generous bonuses, triggering public outrage.

The proposal came a day after four top officials of such banks were put on the griddle before a new Financial Crisis Inquiry Commission. Chaired by former California treasurer Phil Angelides, a politically active Democrat in the Golden State, its mandate is to get to the bottom of last year's Wall Street meltdown.

The four bankers -- Lloyd Blankfein of Goldman Sachs, John Mack of Morgan Stanley, Jamie Dimon of JP Morgan Chase and Brian Moynihan of Bank of America -- essentially acknowledged the justification for tighter federal regulation. But they didn't offer much contrition to inquiring commission members.

When Blankfein at one point compared the economic collapse to a hurricane, Angelides shot back: "Acts of God we'll exempt. These were acts of men and women." Goldman Sachs was among the firms heavily bailed out as too big to fail. It has profited mightily since then and is expected to shell out fat bonuses for last year.

Obama in proposing the new taxes expressed optimism at their scope. "My commitment is to recover every single dime the American people are owed," he said, "and my determination to achieve this goal is only heightened when I see reports of massive profits and obscene bonuses at the very firms who owe their continued existence to the American people -- who have not been made whole, and who continue to face real hardship in this recession."

Called a Financial Crisis Responsibility Fee, the White House said the new tax would be assessed only on banking institutions that received funds from the Troubled Asset Relief Program and hold assets of at least $50 billion. Community banks and small investment houses would be exempt, the White House said, and 60 percent of the taxes would come from the 10 largest such institutions.

The fee would be charged, Obama said, "until the American people are fully compensated for the extraordinary assistance they provided to Wall Street." The administration estimated that $90 billion would be raised this way in 10 years, and $117 billion in 12 years, and the tax would continue until the full TARP bailout was recovered.

Politically, the scheme could go a long way toward cooling off the growing Tea Party movement up in arms over the payouts and the bonuses. At the same time, it might also be difficult for Republicans who ordinarily complain about higher taxes to do so without casting them even more than usual as defenders of the Wall Street titans.

Obama clearly is embattled on the economic front, but this particular initiative should counter somewhat the clamor of the Tea Party protesters.

 

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Obama - Obama's Second-Year Blues | Jules Witcover

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