By Kevin Bogardus - 01/21/10 12:41 AM EST
The labor movement plans to lend its considerable weight to help pass President Barack Obama’s proposed bank fee this year.
Envisioned as a tax on big banks to help recoup the government’s losses from the 2008 bailout of Wall Street, the proposal has attracted labor support. Unions see the tax as a part of a broader agenda for financial regulatory reform.
“We’re already campaigning all over the country about banks,” said Stephen Lerner, director of the financial reform project for the Services Employees International Union (SEIU).
On Tuesday, AFL-CIO President Richard Trumka said the bank fee should be part of the larger push to reform the financial sector.
“Just a year ago, Wall Street banks pleaded for taxpayers to bail them out to save us all from financial disaster. We did. So now that banks and securities firms are on their feet again, what’s their response?” Trumka said in a statement. “A record $145 billion in executive bonuses for 2009, a year when more than 4 million Americans lost their jobs, largely because of the actions of these very institutions. That is simply unacceptable.”
The AFL-CIO has already started to include the proposed bank fee in its literature to union supporters.
The union’s community-organizing affiliate, Working America, has begun an online campaign to win support for the new tax alongside a consumer financial protection agency.
One petition by the group goes after banker bonuses and calls for support for the bank fee “to get back the taxpayer money that bailed out those same banks without penalizing community banks and small firms.”
The unions are pivoting off of news of bonuses for Wall Street executives as they call for greater reform of the financial sector and a new jobs bill, which passed the House in December and is being worked on in the Senate.
“We see this as part of an effort to break up big banks and rein in executive bonuses,” Lerner said. “If the banks have enough money to pay these big bonuses, clearly there is enough money for a program to put Americans back to work.”
Unions see the tax as holding financial executives accountable for the economic crisis they helped create.
Under the proposal, the fee would last 10 years and would be imposed on 50 large banks that have at least $50 billion in assets. Not all of banks that would take a hit took bailout funds.
Conservative estimates put the revenues from the tax at $90 billion, which would help to offset the losses from the Troubled Asset Relief Program.
Despite support from the administration and labor unions, the bank fee faces a difficult road ahead in Congress.
The banking industry is lobbying strongly against the new tax, arguing that it is a threat to the economic recovery.
The fee did come up in the recent Massachusetts special election to fill the seat once held by the late Sen. Edward Kennedy (D).
Massachusetts Attorney General Martha Coakley (D) campaigned for the bank fee, but it did not get her enough traction with Bay State voters. She was upset by Republican Scott Brown.
Nevertheless, labor groups said simmering anger among their members against Wall Street will keep the fee and financial reform a campaign issue in 2010.
“I think it is a safe bet that for politicians who oppose this, they are going to hear from us,” said one union official.