Baucus plans long look before creating a bank tax

Senate Finance Chairman Max Baucus (D-Mont.) on Tuesday said his committee will take a long look at creating a tax on banks that take extraordinary risks before introducing legislation. 

"The Committee is going to take some time over the course of several hearings to consider [the tax]," he said, adding, "We want to understand the best approach to designing a fee, to whom it should apply, and how it might affect the economy and the markets." 

Sen. Chuck Grassley (R-Iowa, the committee's ranking member, urged that any money raised by the tax be used for deficit reduction, and not provide revenue for other initiatives. 

Grassley also said a CBO study on the tax found that it would likely be passed on to consumers by limiting the amount of capital for small businesses and raising borrowing costs on the funds that would be available.