At his inaugural State of the Union address, President Obama issued a call for bipartisanship to push forward reforms on finance, a spending freeze, and a new tax on banker bonuses.
Barack Obama has made his first State of the Union address to Congress since becoming president of the United States in January 2009, and called for reforms across several areas of banking and finance.
“A strong, healthy financial market makes it possible for businesses to access credit and create new jobs,” Obama said. “It channels the savings of families into investments that raise incomes. And that can only happen if we guard against the same recklessness that nearly brought down our entire economy.”
In a breakdown of the president’s key proposals, White House deputy chief of staff, Mona Sutphen said the reforms would include measures to protect both consumers and investors from financial abuse; create accountability for supervision of major financial firms; and restrict the size and scope of financial institutions to reign in excesses. The call also saw Obama reiterate recent remarks that: “Never again will the American taxpayer be held hostage by a bank that is too big to fail.”
The banking sector was unsurprisingly the focus for many initiatives in the address, with president Obama once again promising to recover US taxpayers’ money spent during the bailout: “To recover the rest, I have proposed a fee on the biggest banks. I know Wall Street isn’t keen on this idea, but if these firms can afford to hand out big bonuses again, they can afford a modest fee to pay back the taxpayers who rescued them in their time of need.” After the address, Sutphen explained the proposed ‘Financial Crisis Responsibility Fee’ would require the largest Wall Street firms to pay back monies over a time period of at least ten years, “or however long it takes to recoup every last penny to the American taxpayer.”
President Obama also announced a three year spending freeze, and called for the formation of a bipartisan Fiscal Commission. Sutphen revealed the commission’s remit would be to: “Identify policies to improve the fiscal situation in the medium term and to achieve fiscal sustainability over the long run. The President and members of his Administration will announce additional details in the coming weeks.”
In the State of the Union address, Obama said: “Like any cash-strapped family, we will work within a budget to invest in what we need and sacrifice what we don’t.”
