FinReg Back to Conference Committee?

It looks like in lieu of waiting for Sen. Robert Byrd’s (D-W.Va.) replacement to come into the Senate, Democrats might reconvene the conference committee to fix the financial regulatory reform bill, dropping a $19 billion tax on big banks to pay for the cost of reform. Sen. Susan Collins (R-Maine), viewed as a crucial swing, told reporters today, “The bill is not perfect. But I believe if you take out the new bank tax that, on balance, it would improve our financial system and I would support it.”

Rep. Paul Kanjorski (D-Pa.) confirmed that Democrats are considering quickly reopening to shift the cost elsewhere, saying, “When members make a decision to do something, they really should be more thoroughly committed. … Other than that, we move toward something and get very close like this and have to retrack, and that’s very difficult.”

The $19 billion tax makes the bill entirely deficit neutral — and means that the banks that caused the crisis and benefited from Troubled Asset Relief Program funding would bear the cost of implementation. The bill needs to be deficit neutral. Other options under consideration would likely shift the cost off of the big banks and hedge funds considered most responsible for the financial crisis, onto other, smaller banking institutions.