WASHINGTON – Senate Republicans erupted with anger this morning after Senate Democratic Majority Leader Harry Reid barred all amendments from the Transaction Account Guarantee bill and the Senate voted against proceeding with debate on the banker-backed bill because of the Majority Leader’s ploy, apparently dooming the bankers’ bill.
The Republican minority objected to the bill to extend the federal guarantee on all non-interest bearing bank and credit union accounts because of its potential cost. “This is a taxpayer guarantee and if anything should happen the taxpayers are on the hook,” said Sen. Pat Toomey, R-Penn.
Their objections came amid a barrage of advertising by credit unions—faced with defeat of their member business loan bill--who called the bill another taxpayer bailout for banks.
This morning’s vote means it is almost certain the bankers’ will not succeed in getting the TAG, enacted during the financial criss, extended after it expires at year-end. As a result, the limit on TAG coverage will go back to the same $250,000 insured for all other FDIC- and NCUA-backed accounts on Jan. 1.
The Republicans particularly objected to a practice by Majority Leader Reid to bar all amendments to a bill when it goes to the floor, a practice known as “filling the tree” before the floor vote. Among those amendments Reid prevented was one that would have increased the MBL limit for credit unions to 27.5% of assets.
The credit unions have been so incensed by the bankers’ opposition to the MBL provision they have fought to defeat the bankers’ bill, hoping to force some kind of accommodation between the two groups on their respective bills. CUNA's Chief Lobbyist John Magill expressed hope the defeat of the bankers' bill will prompt them to come to the negotiating table and work with--and not against--credit unions in the finals day of the lame duck session of Congress, lest both parties lose their legislative priorities. "They have to get the message loud and clear," he told The Credit Union Journal.
Several Republicans said they had proposed amendments to the TAG bill but were precluded from debating them because of Sen. Reid’s maneuver. A visibly angry Sen. Robert Corker, R-Tenn., said if allowed he would have proposed letting the FDIC charge special premiums to those banks that wanted to participate and make the program voluntary, thereby eliminating concerns about the cost. "I've got amendments that would have fixed this bill," said Corker.
Republican Roger Wicker of Mississippi said Sen. Reid’s maneuver prevented Colorado Sen. Mark Udall from proposing the MBL provision as an amendment. "This is destructive to the overall process of the Senate, an abuse of the process," said Wicker.