House and Senate negotiators thought they'd cleared a final version of the sweeping financial overhaul bill... until Sen. Scott Brown (R-MA) said he wouldn't support it unless a new $19 billion tax on large banks and hedge funds was removed. Conferees met again Tuesday, The Boston Globe reports, and "agreed on a new way to pay for the additional regulatory oversight in the sweeping legislation, which is intended to help prevent another economic crisis" — replacing the tax with $11 billion in unused bank bailout funds and a small hike in FDIC bank fees. Why is Brown wielding his swing vote — even more crucial after the death of Sen. Robert Byrd (D-WV) — to mess with a done deal? (Watch a Bloomberg report about Brown's change of heart)
Brown's helping out the banks: "So the banks are getting a new regulatory structure meant to prevent another round of chaotic failures, but Brown doesn't think they should have to pay for it," says Ezra Klein in The Washington Post. Instead, he seems to think that "other programs and services should be cut" to prevent another mess of the banks' own making. "Maybe the Tea Partiers are more pro-bank than I'd thought."
"Scott Brown's problems with FinReg"
Brown's an anti-tax hero: "Every bank customer in America" should thank Brown for killing the $19 billion "bank tax," says Ryan Ellis at Americans for Tax Reform. Democrats "hoped to sneak it though" by inserting it "behind closed doors in the middle of the night," and "Scott Brown deserves a lot of credit for standing up to the pressure and saying 'no.'"
"ATR praises Scott Brown for opposing a new 'bank tax'"
This change only helps the worst offenders: Brown may in fact "simply oppose all taxes on principle," says Felix Salmon in Reuters, but that's a "fiscally disastrous" stand that, in this case, is also "a fiasco of tragic proportions." Paying for the new rules though the FDIC hits smaller banks but is "a gift on a platter to banks like Goldman Sachs" that don't have insured deposits, and a free ride for wealthy hedge funds.
"Financial regulatory reform: Not over yet"