Frank Leaning Toward Pre-Paying of Bailout Fund
Treasury Secretary Tim Geithner got an earful last week from House Democrats wary of the White House proposal to pay for government rescues of Wall Street firms by taxing healthy competitors only after Washington steps in. The critics want companies to pre-pay instead into a kind of sitting insurance fund to be used for the same purpose — a strategy also supported by Sheila Bair, who heads the Federal Deposit Insurance Corporation.
This week, Rep. Barney Frank (D-Mass.), the House Financial Services chairman whose systemic-risk legislation includes the after-the-fact fees urged by Geithner, says he’s now leaning toward the Bair plan. Indeed, The Wall Street Journal reports today that “a Frank aide on Friday said he now favors amending the measure to create a prepaid fund.”
There will be plenty of time to make the changes. Frank’s committee will meet tomorrow to begin marking up the bill, with debate on amendments not expected until Thursday, the Journal reports. No doubt some lawmakers are drooling at the chance to tweak the bill.