Obama Takes Tax Plan to Facebook Billionaires

Today the President is hosting a Webcast meeting from Facebook's headquarters. He is expected to discuss the economy, and his plan for reducing the federal deficit. Interesting choice of venue, but not surprising with his ongoing commitment to social media.

Reuters reports:

National debt is a major concern, particularly after the rating agency Standard & Poor's threatened to downgrade the U.S. credit rating, and Obama has set a goal of cutting the deficit by $4 trillion within 12 years or less.

Obama now plans to touring the nation to tout his plan, including ending tax cuts for those making more than $250,000.

"If we're asking people who are going to see potentially fewer services in their neighborhoods to make a little sacrifice, then we can ask millionaires and billionaires to make a little sacrifice," he told Virginia students on Tuesday.

He will get to make that pitch to the 19th wealthiest person in the United States, Facebook CEO Mark Zuckerberg, who is worth a cool $13.5 billion, Forbes calculates.

Obama will host a Webcast meeting on the economy from Facebook headquarters on Wednesday afternoon.

Business is booming in the tech capital, including at Facebook, the social networking site in a bidding war for talent with the likes of Google and Twitter.

The Silicon Valley economy is recovering from the recession, adding more than 12,000 jobs last year, according to Joint Venture: Silicon Valley. The top shops are in a fight for top talent, as well, say recruiters.

Read more here

Obama Made $1.7 Million in 2010, Paid $453,770 Tax

The White House released the income tax return of President Barack Obama and his wife Michelle, and according to their returns, the Obamas made $1.7 million in 2010. The first couple paid over $450,000 in federal income taxes, and donated $245,000 to charitable causes.

From Bloomberg.com:

The Obamas reported $1.3 million in taxable income after deductions, according to a 2010 tax return released by the White House today, the deadline for filing tax returns. Obama earned his $400,000 presidential salary plus almost $1.4 million in income associated with his books.

The Obamas’ adjusted gross income dropped about 69 percent from last year, when it was $5.5 million. Their total federal income tax liability dropped about 75 percent from last year, when it was $1.8 million.

In 2010, Obamas donated $245,075 to charities, or 14.2 percent of their adjusted gross income. That’s less than the $329,100 they gave in 2009, when charitable contributions made up 6 percent of their adjusted gross income. In 2009, the Obamas also donated the entire $1.4 million that the president received for winning the Nobel Peace Prize, which wasn’t counted as taxable income because it was transferred directly to charities.

The largest single donation of $131,075 in 2010 went to Fisher House Foundation Inc., which provides lodging for military families visiting people who are hospitalized. The next-largest contribution, $15,000, went to the Clinton-Bush Haiti Fund.

Read more here

Stocks Edge Higher after Obama Speech

After the President announced his intentions to trim the deficit by $4 trillion the Dow Jones rose 7 points, and the Nasdaq gained 17 points.

From CNN.com:

Despite a strong open -- thanks to better-than-expected earnings and revenue from JPMorgan Chase (JPM, Fortune 500) -- stocks spent the early part of Wednesday's session in the red.

The losses came after JPMorgan CEO Jamie Dimon said that mortgage-related losses would continue for some time, and warned that investors should not expect additional dividend increases beyond the 25 cents set for this quarter. Shares of the bank slid almost 1%. JPMorgan is the first major bank to report first-quarter results.

But the market again reversed course in the afternoon after Obama laid down a series of spending and deficit targets, adding that he wants $3 in spending cuts for every $1 in additional tax revenue.

"Investors wanted to see some movement toward fiscal responsibility, but just not too much and not too soon, and that's exactly what the president gave them," said Doug Roberts, chief market strategist at Channel Capital Research.

Roberts added that the market has been supported by the government's stimulative policies, including the Federal Reserve's Treasury purchases and Congress' decision last December to extend the Bush-era tax cuts.

"Investors are relieved to hear that Obama's plan to reduce the deficit is gradual, not imminent," Roberts said. "The government's deficit has been taking painkillers for years now, and it's finally about to get some surgery. But nobody's amputating anything."

Continue reading here...

Obama Calls for Cutting Tax Breaks to Raise $1 Trillion

Yesterday President Obama announced his intentions to reduce $4 trillion from the federal deficit. His plan includes $1 trillion of tax increases over the next decade, including new deduction limits and higher tax rates for wealthy Americans.

Business Week reports:

“I believe reform should protect the middle class, promote economic growth, and build on the fiscal commission’s model of reducing tax expenditures so that there is enough savings to both lower rates and lower the deficit,” Obama said in his remarks at George Washington University in the capital.

Until now, Obama’s calls for a tax overhaul had focused on the corporate tax code and on allowing income tax rates for high earners to rise in 2013. Under current law, all of the income tax cuts that were extended last year would revert to pre-2001 levels at the end of 2012.

He reiterated his support for those policies today.

“I agreed to extend the tax cuts for the wealthiest Americans because it was the only way I could prevent a tax hike on middle-class Americans,” Obama said. “But we cannot afford $1 trillion worth of tax cuts for every millionaire and billionaire in our society. We can’t afford it. And I refuse to renew them again.”

Obama’s support for revenue-raising tax changes puts him at odds with many congressional Republicans, including House Majority Leader Eric Cantor of Virginia and Senator Orrin Hatch of Utah, the top Republican on the Finance Committee.

More here

Obama Urged to Protect Social Security

Yesterday a group of over 250 policy experts and economists sent the President an open letter urging him to protect the entitlement program. They claimed that Social Security does not contribute to the federal deficit.

CNN reports:

The push to protect the program is just one component in a broader fight between Democrats and Republicans in Washington about how to put the nation back on a path towards fiscal sustainability.

It comes days after Congress approved an 11th hour plan to fund the government, as they narrowly averted a shutdown. But bigger legislative issues remain unresolved, including a proposal to lift the nation's$14 trillion debt ceiling.

Supporters say Social Security is an independent, self-financing program that has no authority to borrow, and therefore cannot deficit spend. But critics say the program is already adding to the shortfall because the federal government must issue new debt to pay back money it borrowed from the Social Security trust fund.

Regardless, both sides generally agree that Social Security needs to be reformed as the nation's population gets older and the number of Americans collecting benefits outpaces the amount of money flowing into the system.

More here

Obama Puts Taxes on Table

The President will lay out his plan for reducing the deficit tomorrow, and in addition to suggesting cuts, Obama will also call for a tax increase in his 2012 budget. The proposal will include a tax hike for taxpayers making over $250,000.

From WJS.com:

In a speech Wednesday, Mr. Obama will propose cuts to entitlement programs, including Medicare and Medicaid, and changes to Social Security, a discussion he has largely left to Democrats and Republicans in Congress. He also will call for tax increases for people making over $250,000 a year, a proposal contained in his 2012 budget, and changing parts of the tax code he thinks benefit the wealthy.

"Every corner of the federal government has to be looked at here," David Plouffe, a senior White House adviser, said Sunday in one of multiple television appearances. "Revenues are going to have to be part of this," he said, referring to tax increases.

Until now, Mr. Obama has been largely absent from the raging debate over the long-term deficit. The White House has done little with the recommendations of its own bipartisan deficit commission. And Mr. Obama's 2012 budget didn't offer many new ideas for tackling entitlement spending, among the biggest long-term drains on the federal budget.

The president stayed out of the long-term deficit debate in an apparent effort to see whether Republicans would move first in offering long-term deficit-reduction ideas—something House Budget Committee Chairman Paul Ryan did with an ambitious plan last week to trim spending now and in the future.

Continue reading at WJS.com…

Obama to Business Leaders: Let's Brainstorm Jobs

On Thursday the President called together a team of business and labor leaders to focus on job creation. He apparently also asked the attendees for their opinions about the current state of the economy. I do love collaborative thinking, let’s hope this was actually productive.

From CNN.com:

"We want to remove any barriers and impediments that are there, but at the same time we want to put a challenge to America's businesses, to take other steps that have been sitting on the shelf for quite some time," Obama said. "We want to make sure we're putting a little pressure on you guys ... so we make sure the economy is working for everybody."

The council replaces the president's former economic advisory team, which had been led by former Fed chair Paul Volcker.

he new jobs council is headed by General Electric Co (GE, Fortune 500). chief executive Jeffrey Immelt and includes a variety of executives, including AOL co-founder Steve Case (AOL) and Intel (INTC, Fortune 500) CEO Paul Otellini.

During the hour-long discussion, executives talked about what they saw as important building blocks to job creation, including an improved education system, better tax policy and less burdensome regulatory changes.

Read more here

Surprise! Obama, GOP Agree On These Cuts

Believe it or not, there are actually some programs that both the President and House Republicans want to cut!

CNN reports:

Amid all the rhetorical denunciations, there are actually a few things the plans have in common. Not enough to make a difference, but a few.

The proposals involved tap into one small part of the budget -- non-security discretionary spending -- for the biggest spending reductions. That slice of the budget accounts for around 12% of total spending, but is responsible for many popular government activities.

President Obama's 2012 budget would freeze non-security discretionary spending for five years. And because Obama wants to spend more on certain programs within that portion of the budget, he has to slash funding for hundreds of others.

The Republican plan would cut at least $61 billion in the final seven months of fiscal year 2011, which is a far steeper reduction than Obama wants in fiscal year 2012.

Wait. We agree on something?

Drill down further into the plans, though, and you'll find a smattering of specific programs that both sides want to cut.

Why U.S. debt matters to you

President Obama and House Republicans both propose to reduce funding for a program that helps low-income people pay their energy bills during periods of extreme heat or cold.

Read more here

Obama Tries to Woo Business, Slams 'Burdensome' Tax

According to reports, the President increased his efforts to woo US businesses earlier this week in a speech promising to tackle the burdensome corporate tax code.

From MSNBC.com:

Obama, on a drive to win over business and independent voters before the 2012 presidential election, also repeated a promise to advance trade deals with Panama and Colombia that would help U.S. companies, but he did not lay out a timetable for getting the pacts passed.

Obama to Chamber: 'We can and must work together'

"I understand the challenges you face. I understand you are under incredible pressure to cut costs and keep your margins up. I understand the significance of your obligations to your shareholders and the pressures that are created by quarterly reports. I get it," Obama told the powerful U.S. Chamber of Commerce, which has often opposed the president for what it sees as his "big government" agenda.

Members of the Chamber, which the White House has accused of funding ad campaigns against Democrats during last year's congressional elections, listened politely but were mostly noncommittal in response to the president.

More here

The Blur Between Spending and Taxes

While Congress is getting back to work, and deficit reduction is a high priority, there’s a lot of rhetoric being bandied about. Spending cuts and tax cuts are a big focus. But what does it really mean? The NY Times tries to deep dive to see what the big difference really is.

From NYTimes.com:

Should the government cut spending or raise taxes to deal with its long-term fiscal imbalance? As President Obama’s deficit commission rolls out its final report in the coming weeks, this issue will most likely divide the political right and left. But, in many ways, the question is the wrong one. The distinction between spending and taxation is often murky and sometimes meaningless.

Imagine that there is some activity — say, snipe hunting — that members of Congress want to encourage. Senator Porkbelly proposes a government subsidy. “America needs more snipe hunters,” he says. “I propose that every time an American bags a snipe, the federal government should pay him or her $100.”

“No, no,” says Congressman Blowhard. “The Porkbelly plan would increase the size of an already bloated government. Let’s instead reduce the burden of taxation. I propose that every time an American tracks down a snipe, the hunter should get a $100 credit to reduce his or her tax liabilities.”

To be sure, government accountants may treat the Porkbelly and Blowhard plans differently. They would likely deem the subsidy to be a spending increase and the credit to be a tax cut. Moreover, the rhetoric of the two politicians about spending and taxes may appeal to different political bases.

But it hardly takes an economic genius to see how little difference there is between the two plans. Both policies enrich the nation’s snipe hunters. And because the government must balance its books, at least in the long run, the gains of the snipe hunters must come at the cost of higher taxes or lower government benefits for the rest of us.

Millionaires to Obama: Tax us

For months we have seen anti-tax activists who are calling on legislators to extend all of the Bush tax cuts. However, a group of wealthy taxpayers have emerged that are actually asking to be taxed. More than 40 of the wealthiest people in the U.S. are asking the government to raise their taxes; saying they have more than they can ever need, so why not spread it around?

Yahoo News reports

More than 40 of the nation's millionaires have joined Patriotic Millionaires for Fiscal Strength to ask President Obama to discontinue the tax breaks established for them during the Bush administration, as Salon reports.

"For the fiscal health of our nation and the well-being of our fellow citizens, we ask that you allow tax cuts on incomes over $1,000,000 to expire at the end of this year as scheduled," their website states. "We make this request as loyal citizens who now or in the past earned an income of $1,000,000 per year or more."

The group includes many big-time Democratic donors such as Gail Furman, trial lawyer Guy Saperstein and Ben Cohen of Ben & Jerry's ice cream (pictured). The list remains open to millionaires who want to sign on.

Read more here

Obama's Debt Panel Releases Three Tax Reform Options

Earlier today President Obama's National Commission on Fiscal Responsibility and Reform released a draft of their report on options for tax reform. The final report is due to be issued on the first of December. You can download a PDF of the report here or check out the following summary of the three options courtesy of the TaxProf.

Option 1: The Zero Plan

• Consolidate the tax code into three individual rates and one corporate rate
• Eliminate the AMT, Pease, and PEP
• Eliminate all $1.1 trillion of tax expenditures
• Dedicate a portion of savings to deficit reduction and apply the rest to reduce all marginal tax rates
• Add back in any desired tax expenditures, and pay for them by increasing one or all of the rates from their zero expenditure low

Option 2: Wyden-Gregg Style Reform Individual Tax Reform

• Repeal AMT, PEP, and Pease
• Establish 3 rates – 15%, 25% and 35%
• Triple standard deduction to $30,000 ($15,000 for individuals)
• Repeal state & local tax deduction, cafeteria plans, and miscellaneous itemized deductions
• Limit mortgage deduction to exclude 2nd residences, home equity loans, and mortgages over $500,000
• Limit charitable deduction with floor at 2% of AGI
• Cap income tax exclusion for employer-provided healthcare at the amount of the actuarial value of FEHBP standard option
• Modify and repeal several other tax expenditures
• Dedicate portion of savings to deficit reduction Corporate tax reform * Reduce corporate tax rate to 26%
• Permanently extend the research credit
• Eliminate and modify several business tax expenditures, including:
• Domestic production deduction
• LIFO method of accounting
• Energy tax preferences for the oil and gas industry
• Depreciation rules
• International tax reform including a territorial system

Option 3: Tax Reform Trigger

• Call on Finance and Ways & Means Committees and Treasury to develop and enact comprehensive tax reform by end of 2012
• Put in place across-the-board “haircut” for itemized deductions, employer health exclusion, and general business credits that would take effect in 2013 if reform is not yet enacted
• Haircut would limit proportion of deductions and exclusions individuals could take to around 85% in 2015. Similarly, corporations would only take some proportion of their general business credits
• Set haircut to increase over time until tax reform is enacted

President Obama’s Tax Plans

As expected, President Obama’s speech from Cleveland last night unveiled his desire to expand and make permanent the business research and development tax credit, institute a tax deduction for any business capital investment, and to extend the Bush tax cuts for taxpayers earning under $250,000 a year. Furthermore, President Obama has introduced plans to invest $50 billion into public works and infrastructure projects.

Of course the big question is will tax cuts help our economy recover? The short answer: we don’t know. These tax cuts could end up like the Cash for Clunkers or the First Time Homebuyers Credit – meaning they spur people, who were already planning to make such purchases, to buy during a small window of time. In essence, it only changes the timing of the purchase, and when the window of time ends, sales fall off the deep end.

Some would argue that these programs were helpful to the economy, and softened the home and new car sales slump our nation was facing last year. At the end of the day, like any economic activity, it’s impossible to say what would have happened without the Cash for Clunkers or First Time Home Buyer’s credit. For all we know, the downturn could have been much worse.

Taxpayers who were able to take advantage of those programs were helped by the extra tax break, and likely used the money they saved on other purchases, adding more economic activity.
I can tell you that business owners will happily utilize any tax break we can get. I am a fan of incentivizing research and development, and the jobs that come along with it. Our nation should be at the forefront of new technologies and ideas.

While we don’t know what the end result will be, or if Congress will even take action on President Obama’s proposals, we can take this as a jumping off point for a discussion about how to encourage our economy.

More Tax Cuts

President Obama will propose a new bevy of tax cuts to help small business owners. Before he announces the actual cuts, rumors are swirling. According to a report from NPR today, we can expect to see two specific proposals:

1. Businesses would be allowed to write off 100% of new capital investments through 2011. Companies are already allowed to deduct these expenses, but the deduction is taken over a span of several years. This would be an upfront, immediate gratification business deduction. White House Economists estimate this could reduce business taxes by approximately $200 billion over two years.



2. Permanently instate the tax credits for research and development. This tax credit is usually renewed and extended by Congress each year, which is time consuming. In addition, many business owners are frustrated in some gaps in the tax credit. Hopefully this new cut will solve those issues. The estimated cost of this proposal is around $100 billion over 10 years.

In times like this, business owners need every bit of help they can get, and these tax breaks will go a long way in helping businesses of all sizes. In addition, the way these breaks are focused will drive more economic activity – after all, someone has to make and sell the capital equipment, and research and development are crucial to keeping America moving forward.

On the other hand, since we are facing incredible deficits, we will have to make up for the lost tax revenue somewhere. The question is, where will it come from?

(Hat tip, NPR )

$26 Billion for States Passes Key Test Vote

A measure to send federal aid to cash-strapped states passed a key vote in the Senate, putting it one step closer to becoming law. However, if a final vote is not made by the end of the week, the bill will have wait until the end of the month because the Senate has an August recess scheduled to begin next week.

The measure, which passed by a 61-38 vote, contains $16.1 billion in additional Medicaid money and $10 billion in education funding to prevent teacher layoffs.

State officials have been desperately lobbying their representatives, saying they need the money to shore up their budgets. President Obama weighed in Monday, asking lawmakers to pass the bill.

Senate Democrats needed to garner at least 60 votes for the measure to pass this initial vote, meaning some Republicans had to cross the aisle. That help came in the form of Maine Republicans Susan Collins and Olympia Snowe.

A final vote could come late in the week, just before the Senate is scheduled to recess for the long August break. The measure would then have to go back to the House, which has already recessed. So it might not get to President Obama's desk until September.

Continue reading at CNN.com…

Kagan Filed Brief on Behalf of IRS in Textron Case

Supreme Court nominee Elena Kagan has been in the headlines since President Obama announced her nomination. Since she does not have a judicial record, reporters and bloggers are desperate to learn more about her tax and financial views. According to WebCPA, while servicing as Solicitor General Kagan filed a brief on behalf of the IRS.

“When the case was originally considered last winter, the First Circuit held the documents should not be produced because they were protected by the work product doctrine, which is in both case law and the Federal Rules of Civil Procedure. The doctrine provides that documents prepared in anticipation of litigation do not need to be produced to an adversary,” she said. “The policy is that the adversary should not have the opportunity to build a case by ‘taking a peek’ at the other side’s thoughts and strategies.”

The government wants to look at the work papers, naturally, because they document what the company itself considers its questionable tax positions.

In the government’s brief filed in April urging the Supreme Court not to hear the case, Solicitor General (and now Supreme Court nominee) Elena Kagan stated, “By characterizing essentially any interaction between a taxpayer and the IRS as ‘litigation,’ petitioner [Textron Inc.] and its amici [friends of the court] fail to appreciate the dynamics of our self-assessing tax system. In an administrative tax proceeding, the ‘parties are not adversaries, but rather two elements of the tax regulatory regime, with one party reporting its self-assessed tax liability and the other party attempting to verify that self-assessment.’”

Continue reading at WebCPA.com…

A Few Quirky Tax Breaks That Aren't Going Away

We have all heard about the tax increases scheduled to take affect over the next few years as a result of President Obama’s health care legislation, but you might be surprised to learn that Congress passed a series of tax cuts earlier last month. According to this article from the Wall Street Journal, the House of Representatives passed a series of tax law changes that will affect employer-provided cell phones, the gift-tax exclusion, and employee rewards. I have included a snippet of the WSJ article explaining these modifications to the tax code below, but be sure to check out the full article here.

The "Masters exemption"

Homeowners who rent out their property for 14 or fewer days a year may pocket the income tax-free. This break has given homeowners near the Augusta National Golf club a sweet deal on income over the years, in some cases up to $20,000, from short-term rentals during the Masters tournament each April.

The property doesn't have to be a first home, but the exemption can be taken only once a year, says CPA Douglas Stives of Monmouth University. It can be taken on more than one property, according to the IRS.

Employee awards

Employers can make awards to workers valued as much as $400 a year for good attendance, safe driving, years of service and so on. The criteria must be objective and fair, but the awards aren't taxable to the employee and are fully deductible by the employer.

Gift-tax exclusion

One of the best estate-planning options remains the $13,000 annual gift-tax exclusion. Anyone may give anyone else up to that amount per year in cash or property, free of gift tax. One partner of a married couple can double the gift and the exemption. So a couple with three married children and six grandchildren could give away over $300,000 a year, tax-free.

The Senate’s New Job Creation Bill

After Obama announced his intention to make job creation a number one priority, Senate leaders moved quickly to put together legislation they hope will fix the ongoing unemployment problem in this country. Although there have been a few stalls, Congress is hoping to get some type of job creation legislation passed and signed into law within a few weeks.

Forgotten House Legislation

With all this talk about the Senate’s bill, many people have forgotten that the House of Representatives passed similar legislation back in December. Their plan would cost an estimated $154 billion but lost momentum after the beginning of the New Year when the Democratic party lost its 60 vote filibuster-proof majority.

Original $85 Billion Legislation

Early last week, the White House and Senior Democrats had announced their intention to vote on an $85 billion dollar package after negotiating with Republicans to come up with a bipartisan bill. However, after the full legislation was revealed it was met with fierce resistance from many liberal Senators who preferred the House’s bill.

Last Minute Reduction

After receiving criticism from numerous Senators, Majority Leader Harry Reid unveiled a new, lesser bill at the last minute on Friday. This new legislation combines about $15 billion in tax provisions, with about $20 billion in cash infusions into Federal highway and infrastructure programs, for a total cost of only $35 billion. However, these last minute changes angered Republicans who spent weeks working with Reid on a bipartisan bill.

What’s Left in the Bill?

• Incentives to Hire

One of the cornerstones of the legislation is the incentive for businesses to hire unemployed workers this year. All businesses that hire qualifying workers will get an exemption from the 6.2% Social Security payroll tax in 2010. Additionally, businesses that keep those workers for more than a year will be eligible for a $1,000 tax credit per employee. Data suggests this incentive would result in 180,000 new jobs, and cost an estimated $13 billion.

• Capital Investments

Another tax break for business owners that remains in the bill is a law that would allow businesses to write off up to $250,000 in capital investments in 2010 as opposed to depreciating those costs over time.

• Expanded Build America Bonds

The new bill would also extend the Build America Bonds program, which was a result of last year’s stimulus spending. The program subsidizes interest costs for local bonds issued to pay for infrastructure improvement and development projects.

Future of the Legislation

Unfortunately, the future of even this new legislation is questionable. Congress is on recess next week, but when they return on the 22^nd Harry Reid is going to need to work on generating support for the bill. Top Republicans and Democrats expect that the legislation would fall short of the 60 votes needed to proceed, and even if does pass the Senate resistance is already building in the House of Representatives where top Democrats – including Nancy Pelosi – have expressed concern about the bill.

Is Something Better than Nothing?

I think Harley Shaiken, a professor at the University of California, Berkeley put it best when he was quoted in a Washington Post article asserting that the watered down legislation “is better than nothing, but it ought not be confused with a solution to the jobs problem." Since the recession began 8 million jobs have been lost, and current estimates show the stripped down legislation would only create around 200,000 jobs. It is going to take a lot more than just this legislation to stop the ongoing unemployment problem in this country.

Big Banks vs. Obama

From NewsWeek.com:

The big banks are considering challenging President Obama's proposed tax on very large banks and financial institutions in court as unconstitutional. Let's see if I have this right. The Federal Reserve deciding unilaterally, without public debate, to assume hundreds of billions of dollars of financial companies' liabilities, spent hundreds of billions to buy mortgage-backed securities and potentially expose taxpayers to massive losses: That's totally constitutional. Congress passing a law suggesting that a small portion of the bailed-out financial industry, which is still benefitting from massive government subsidies, pay a fee for running huge balance sheets: That's unconstitutional.

The industry has argued that the Obama bank tax would hurt the recovering economy because banks would pass on higher costs to customers and borrowers rather than eat them. Higher taxes mean less money available for lending. In theory, that may be true. But when you consider the size of the banks, the size of the tax, and the vast sums of money they squander each quarter because of poor lending decisions—the proposed banking tax is a drop in the bucket.

The tax amounts 15 basis points on the net liabilities of financial institutions that have assets greater than $50 billion and that received capital as part of the TARP or issued debt as part of the Temporary Liquidity Guarantee Program, which allowed banks to save hundreds of millions of dollars on interest costs. It would total about $90 billion—$9 billion per year over 10 years. Sean Ryan of Wisco Research in Madison, Wisc., calculated the expected tax hits for several institutions, which he provided to me. The bigger you are, the harder you get hit: Giants JPMorgan Chase and Citi would each pay about $1.5 billion per year, while a merely large bank like US Bancorp would pay about $100 million per year.

Obama Says Jobless Rate Likely to Tick Up for Several Months

Just days after returning from a week of travel, President Obama is making headlines this morning with his announcement that the country’s unemployment problems are not likely to improve any time soon.

"My expectation is that we will probably continue to see unemployment tick up for several months," Mr. Obama told reporters after a meeting with Dutch Prime Minister Jan Peter Balkenende.

According to a new article from the Wall Street Journal, “unemployment stood at 9.5% nationwide last month, a rate that has prompted calls for additional stimulus measures, as well as criticism that the earlier $787 billion package has so far failed to create jobs. Mr. Obama, who has said he believes joblessness will soon hit 10%, will visit Michigan later Tuesday, a state already dealing with double-digit unemployment.”

While he said he doesn't have a "crystal ball," Mr. Obama said he anticipates unemployment will follow historical trends and lag "for some time" even after an economic recovery begins.

On the positive side, he said the U.S. has "seen some stabilization in the financial markets, and that's good because that means companies can borrow and banks are starting to lend again."

"The challenge for this administration is to make sure that even as we are stabilizing the financial system, we understand that the most important thing in the economy is people able to find good jobs that pay good wages," Mr. Obama said.

With the economy stalling, and the administration’s recent admission that they had underestimated the scope of the troubled economy it is no wonder that experts are beginning to question Obama. According to a story on CBS News, “Obama’s economic forecasts for long-term growth are too optimistic, many economists warn, a miscalculation that would mean budget deficits will be much higher than the administration is now acknowledging.”

Christina Romer, chairwoman of the White House’s Council of Economic Advisers, said in a POLITICO interview that the administration—like many independent economists—did not fully anticipate the severity and pace of this recession. She said the White House will be updating its official forecasts.

The new numbers will come as part of a semiannual review that, under ordinary circumstances, is the kind of earnest-but-dull document that causes many Washington eyes to glaze over.

This time, however, the new forecasts - if they are anything like what many outside economists expect - could send a jolt through Capitol Hill, where even the administration’s current debt projections already are prompting deep concerns on political and substantive grounds.