At least 1,500 members of the National Nurses Union (NNU) and Occupy D.C. activists marched on the Treasury Department on Thursday morning to call for a “meaningful” tax on Wall Street trading — one day after Senator Tom Harkin (D-Iowa) and Rep. Peter DeFazio (D-Oregon) introduced a bill that would levy a small tax on a wide range of financial transactions.
The unplanned convergence between Democratic politicians and the protesters, who have generally refrained from making specific demands, offered a hint of how the populist energy from the “Occupy” movement might translate into policy. “Occupy Wall Street made people feel they’re part of a very large community,” said DeFazio, who has supported similar legislation in the past, in an interview with The National Memo. “As people have been awakened, they’re going to look for things to take action on.”
The White House has not been supportive of previous proposals. President Barack Obama shied away from the policy and instead revived a 2010 idea for a “financial crisis responsibility fee” when he arrived at the G20 summit in Cannes, France, this week; the fee would recoup the remaining losses from the 2008 bailout and help provide a base of support for any future rescues. (The conference itself, which brought together the most powerful economic policymakers in the world so they could meet on the elegant French Riviera, seemed designed to spark populist outrage.)
Secretary of the Treasury Tim Geithner has long been skeptical of a tax — reportedly arguing against one in a September meeting with top European financial officials — and multiple high-level labor sources said they considered him the main obstacle within the administration.
“Geithner has voiced opposition but in a way that leaves the door open,” DeFazio said with a hint of optimism, indicating that he believes the secretary will only support an FTT if it is imposed by a large contingent of those countries with active financial markets, including England and other E.U. nations.
DeFazio and Harkin’s bill, the Wall Street Trading And Speculators Tax Act, would slap a tax of 0.03 percent (or three basis points) on transactions that occurred after the initial issuance of a stock, bond, and other kinds of securities. The rate was kept deliberately low so everything but the riskiest kinds of trades would still be profitable.
“What we want to do is maximize our revenue without hurting pension funds and self-directed IRAs,” said DeFazio, an outspoken liberal who voted against the TARP bailout in 2008. “But [we also want] a level of tax that’s adequate to drive the super-high level speculators out of the market, or at least exact a substantial revenue from them.”
Harkin’s Communications Director Kate Cyrul also argued that a higher rate “hurts the likelihood of the measure becoming law,” but the marchers in D.C. seemed unenthused by the prospect of a watered-down legislative compromise. Instead, the protesters called for a tax of 0.5 percent (or 50 basis points) — nearly 20 times higher than the rate proposed by two of the most liberal members in Congress — in order to raise $350 billion for jobs programs and infrastructure investment.
“We don’t want a token,” said Karen Higgins, a staff nurse from Boston and a national co-president of NNU. “We went through this with the health care bill, where instead of doing what is right, we did [what was easy].” The nurses don’t want to pass a small tax that critics will be able to say failed to bring in substantial new revenues or significantly change Wall Street’s behavior.
The rest of the labor movement, while not as hard-line as the nurses’ union, also wants to see a heftier tax that makes a dent in Wall Street gambling.
“The AFL-CIO believes that a 10 basis points tax would serve three critical goals: raising considerable revenue, increasing the fairness of our tax code, and deterring speculative trades that constitute either gambling or gaming the system rather than long-term investing,” said Jeff Hauser, a spokesman for the labor group.
But Democratic aides close to the legislation say going higher than three basis points risked halting many transactions, including derivative trades (and thus gutting the revenue stream), something they indicated was not a goal of their bill, even if Occupy Wall Street protesters might welcome the change.
Follow National Correspondent Matt Taylor on Twitter @matthewt_ny