WASHINGTON -- Responding to a threat by Scott Brown to vote against the the massive Wall Street overhaul package, US Representative Barney Frank and Senator Christopher J. Dodd were planning to reconvene a conference committee today to revisit the bill and remove a $19 billion tax on big banks that would have paid for increased oversight.
Dodd told reporters that they were planning to scrap a $19 billion bank fee – which has been Brown’s latest objection – and that the 43-member committee would meet as early as this afternoon.
Brown declined to comment on the changes, telling a battery of reporters that he wanted to wait and see what the conference committee decided.
Earlier today, Brown said that he would vote against the Wall Street regulatory overhaul that was adopted by the committee last week, citing the last-minute addition of the $19 billion in bank taxes to pay for the bill. It was a switch in position for Brown, who had previously voted in favor of an earlier version in the Senate.
The Massachusetts Republican sent a letter this morning to the top House and Senate negotiators – Representative Barney Frank, of Newton, and Senator Chris Dodd, of Connecticut – to reiterate his strong opposition to the tax.
It was the second time that Brown has used the leverage of his swing vote in the Senate to influence the bill in ways that were beneficial to the financial industry. He previously had made his continuing support contingent on winning key provisions in the conference committee for State Street Corp. and other banks, allowing them to continuing using a percentage of their capital to invest in Wall Street securities.
Brown last week objected to the last-minute addition of the bank tax and then yesterday said he would vote against the conference committee compromise.
"If the final version of this bill contains these higher taxes, I will not support it,” Brown wrote, saying the new tax would be passed along to consumers and would hurt business during a shaky economy. Brown has indicated that he had problems with the tax, but until today had not said definitively that he would oppose it unless it is removed.
The tax would be spread over five years, and would help pay for the expenses of greater oversight duties by a variety of federal agencies. It would be assessed on banks with assets of more than $50 billion and hedge funds of more than $10 billion. Fees would vary, depending on how risky the institutions is.
Frank has argued that taxing the largest banks is a fair way to pay for implementing the bill.
“It’s a fairly small amount, it’s only for five years,” Frank said in an interview on Friday. “And it’s probably smaller than their bonus pool for their top executives.”
Brown so far has not said how he thinks the bill should be paid for. In his letter today, he requested that Dodd and Frank “find a way to offset the cost of the bill by cutting unnecessary federal spending.” Brown did not identify where those cuts should be made, but wrote, “There are hundreds of billions in unspent federal funds sitting around, some authorized years ago for long-dead initiatives. Congress needs to start to looking there first, and I stand ready to help.”
Brown was one of four Republicans to support the Senate package, but his new opposition complicates final passage of the final reform bill. President Obama has hoped to sign the bill by July 4, but that is growing increasingly unlikely as Senate Democrats scramble to round up votes.
Matt Viser can be reached at email@example.com.
About Political Intelligence
Glen Johnson is Politics Editor at boston.com and lead blogger for "Political Intelligence." He moved to Massachusetts in the fourth grade, and has covered local, state, and national politics for over 25 years. E-mail him at firstname.lastname@example.org. Follow him on Twitter @globeglen.