Senate advances bill extending guarantees for small business bank accounts

The Senate advanced a bill that would extend a guarantee program for certain bank accounts benefiting small businesses.

Senate Majority Leader Harry Reid (D-Nev.) introduced S. 3637, a bill extending the Transaction Account Guarantee (TAG) program through 2014.

TAG was created during the financial crisis, and provides for government guarantees for non-interest-bearing bank accounts used by small companies and municipalities. Companies and local governments holding large amounts of money for a brief period of time use the transaction accounts.

Extending TAG would keep an estimated $1.4 trillion insured by the government — something banks believe is needed given the continuing economic uncertainty.

“This program provides certainty to businesses at uncertain times,” Sen. Tim Johnson (D-S.D.) said ahead of the vote Tuesday. “With concerns about the fiscal cliff and the continuing instability in European markets, I believe this is still needed.”

Johnson said the bill has a cost recovery provision, meaning taxpayers wouldn’t be on the hook. He said the bill “is not and never will be a bailout.”

The Senate voted 76-20 to end debate on a motion to proceed to consideration of the bill. The motion to proceed was then approved immediately by unanimous consent. The Senate is expected to continue work on the bill this week.

Republican Sens. Tom Coburn (Okla.), Bob Corker (Tenn.), Mike Crapo (Idaho), Jim DeMint (S.C.), Dean Heller (Nev.), Ron Johnson (Wis.), James Risch (Idaho), Marco Rubio (Fla.), Rand Paul (Ky.), Kelly Ayotte (N.H.), Pat Roberts (Kan.), Jeff Sessions (Ala.), John Thune (S.D.), John Barrasso (Wyo.) and Pat Toomey (Pa.) were among those who voted against the motion.

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