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Some Democrats reluctant to include bank tax in overhaul
Sen. Orrin G. Hatch (R-Utah) questioned why the tax would not apply to automakers General Motors and Chrysler, which each received massive bailouts, as well as mortgage financiers Fannie Mae and Freddie Mac. Hatch added that "a lot of banks out there that didn't cause the problem . . . would be stung by this fee."
Geithner responded that since Fannie and Freddie have been taken over by the government already, it would simply be "one hand of government paying another." The automakers, he said, were excluded because they did not cause the crisis, but were victims of its effects.
Even if lawmakers warm to the proposal, the administration has to coordinate with other members of the Group of 20, an association of the world's largest economies. Some governments, such as Canada, have strongly opposed the idea of a global bank tax, which could punish financial firms that did not contribute to the credit crisis.
Democrats pledge speed
Also Tuesday, lawmakers failed to get to a vote on the very first -- and presumably uncontroversial -- amendment to the bill, a measure by Sen. Barbara Boxer (D-Calif.) stating that no taxpayer money will go toward aiding failing companies.
Despite the lack of momentum on the massive legislation, Democratic leaders continued their push to move it quickly through the Senate.
"We're going to finish this legislation next week, or sooner," said Majority Leader Harry M. Reid (Nev.).
Dodd even suggested on the Senate floor Tuesday that lawmakers start early, stay late and work over the weekend if needed to make progress on the bill.
Senate Minority Leader Mitch McConnell (R-Ky.) scoffed at the idea of moving hastily.
"I don't think this is a couple-of-weeks bill," he said. "It's not that we don't want to pass it, but we do want to cover the subject. And there are a number of important amendments to be offered dealing with the consumer protection, with the government-sponsored enterprises, with derivatives and the rest."