By Stephanie Miceli -- June 30, 2010
Initially, Democrats proposed a $19 billion tax on the largest national banks and hedge funds to finance expanded federal financial oversight. The additional cost, however, threatened to drive away Republicans such as Brown, who said it would result in new costs for consumers and impede banks' ability to offer credit.
On Tuesday, in an effort to appeal to moderate Senate Republicans, Democrats instead proposed to conclude early the $700 billion Troubled Asset Relief Program. Lawmakers say this move could actually save taxpayers between $10 billion and $12 billion, because costs from initiating new TARP programs would be eliminated.
As the revisions comes before him, President Obama has proposed using $30 billion from the very same program (TARP) to provide inexpensive capital to smaller banks, which would in turn lend the money to small businesses.
Senate Democrats have also proposed issuing smaller fees on banks through the Federal Deposit Insurance Corp. to garner Republican support.
A Senate majority, of 60 votes is required to forgo the potential of a filibuster. Currently, the Democrats hold a 59-seat Senate majority, which has been down by one since the death of West Virginia's Robert C. Byrd. Among the Senate Republicans who have expressed support are Maine's Olympia Snowe and Susan Collins, but the support of one more will truly secure the next step in passing the bill. 57 Democrats are expected to vote for the bill.
Brown, who stated his concerns in a letter yesterday, told reporters, "I've said right from the beginning that I can't support a bill that's going to add a $19 billion bank tax. You think the banks are going to pay it? No. The individual consumers are going to pay this in the middle of a two-year recession, through higher ATM fees, credit card, bank fees.''
Even after House and Senate negotiators constructed last-minute changes to the bill, including taxes on banks with assets over $50 billion and hedge funds with assets above $10 billion to rescue troubled institutions, Brown declined commentary to the Boston Globe.
The House is planning to vote on the final proposal today,
and the Senate is expected to vote President Obama has expressed hope to sign
the bill by July 4. Democrats' needed final vote could come from either Brown
or a new appointee to the late Byrd's seat. With Brown's support, the vote
could be held this week; without it, Democrats will have to wait until the
second week in July, when a replacement will fill Byrd's seat.
(Photo Courtesy: AP Images)
