Domestic Taxes

Consumers protections will be significantly weakened under a Republican proposal, President Barack Obama said Thursday. 

Obama voiced his concerns that an amendment authored by leading Senate Republicans includes "dangerous carves outs for payday lenders, debt collectors," as debate in the Senate continued today on financial regulatory reform legislation. 

The amendment authored by Senate Banking ranking member Richard Shelby (R-Ala.) and Senate Minority Leader Mitch McConnell (R-Ky.) "will gut consumer protections and is worse than the status quo," Obama said in a release. 

The proposal "hurts the ability of community and local banks to compete by creating an unlevel playing field with their non-bank competitors," he said. 

Republican are arguing that a Democratic proposal is too sweeping and corrals any small business that deals with credit while failing to let consumers make their own decisions. 

Senate Banking Chairman Chris Dodd (D-Conn.) insisted that the Republican amendment would allow the wrong regulators to determine consumer protection, whose primary responsibility is the safety and soundness of banks not consumers. He said the proposal also calls for an assessment fee on community banks to pay for regulatory enforcement. 

Obama said he wants to work with both parties on a solution but he won't tolerate alternatives that strip consumer protections and "do nothing to empower the American people by cracking down on unfair and predatory practices."

House leaders on Thursday are weighing whether legislation extending several expired measures should return to the Ways and Means Committee. 

The move would allow members to work out differences between the extender bill that already passed the chamber and what the Senate wants the legislation to include. 

"We're suppose to find out a little bit more this afternoon," said Rep. Ron Kind (D-Wis.), who sits on the committee. 

Ways and Means Chairman Sandy Levin (D-Mich) said no decision has been made on the issue, but said Majority Leader Steny Hoyer (D-Md.) wants the bill on the floor within the next 2 weeks. 

Ahead of Congressional action, the Federal Reserve is tightening capital and liquidity rules and aiming to change compensation structures to cut down on risk taking, the central bank's chief said Thursday. 

While the Fed backs closing gaps in the regulatory framework, the central bank is "not waiting to implement improvements that can be accomplished within our existing authority," Fed Chairman Ben Bernanke said during the 46th Annual Conference on Bank Structure and Competition at the Federal Reserve Bank of Chicago. 

Supervision of the largest, most complex financial institutions also has been strengthened. 

The financial taught Fed officials that there needs to be an overarching, multidisciplinary approach and perspective while monitoring financial firms and instruments and markets.

"In its evolving supervisory approach, the Federal Reserve is bringing together the skills of economists, financial market specialists, payment system experts, and others, with those of bank examiners to get the widest possible perspective on financial developments," Bernanke said. 

Long time appropriator Sen. Robert Byrd (D-W.Va.) expressed sadness tonight over Rep. David Obey's decision not to run for re-election. 

"I am disheartened to learn that my dear friend and fellow appropriator, Dave Obey, will not stand for re-election in November," Byrd said tonight in a release. 

Obey, chairman of the House Appropriations Committee, told reporters earlier Wednesday that he's 'bone tired' and is ready to leave Washington. 

"He is a rare breed in an institution where sound bite politics takes precedence over procedure, and who knew and never let people forget that the power of the purse lies with the Congress," Byrd said. 

Obey was first elected to Congress in a 1969 special election in Wisconsin and has served on the Appropriations panel since early in his first term -- when he was only 30. He first became chairman in 1994 after the death of William Natcher of Kentucky became the youngest lawmaker to take the helm after beating out a more senior Member for the job. 

"He has tangled with presidents, with Senators, yes, even this Senator, with his House colleagues, and administration officials, always trying to what was right for America with a conviction rarely seen," Byrd said. 

"Dave Obey will be enormously missed in the Congress and by this Senator."

Ways and Means Chairman Sandy Levin (D-Mich.) emerged from a meeting with Treasury Secretary Timothy Geithner saying he might create a bank tax that is based on assets instead of one based on profit. 

"He made clear a profits tax would be much more difficult and nobody challenged that," he said. "I don't challenge that." 

Levin originally wanted to base the tax on profits. But yesterday, Geithner told a Senate panel that a tax based on assets would be the better approach to curbing excessive risk-taking by financial institutions - a chief goal for the White House in creating the levy. 

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Two senators are planning to offer an amendment to financial regulatory reform legislation calling for an audit of the Federal Reserve to determine which financial institutions received financial help. 

Sens. Chuck Grassley (R-Iowa) and Byron Dorgan (D-N.D.) said Wednesday that the Fed's unwillingness to share the information about its emergency lending programs despite federal court rulings prompted the amendment. 

The Fed has said it will appeal the rulings, the last one in March, calling for transparency on how much and under what terms for financial firms received trillions in assistance. 

Grassley is already one of 20 co-sponsors on a similar amendment offered by Sen. Bernie Sanders (I-Vt.). 

"The Fed refuses to disclose this information to the American people so we are taking Congressional action to determine how the Fed has used these trillions of dollars," Dorgan said in the joint release. 

Ways and Means Chairman Sandy Levin (D-Mich.) told reporters on Tuesday that legislation extending several expiring provisions will be deemed a jobs bill. 

"Nobody understands extenders and a lot of the extenders relate to jobs," he said. "That's what R&D is, and larger provisions relate to jobs." 

For years, lawmakers have called legislation resuscitating expired provisions, like the research and development tax credit or the above-the-line deduction for education expenses, an "extender bill." But the economic downturn has prompted Democratic leaders to reclassify the annual extension of expiring measures as mechanism for creating jobs.

Ways and Means Chairman Sandy Levin (D-Mich.) said legislation extending several expiring provisions will not be expanded to include a whole host of other issues. 

"This won't be a Christmas tree," he told reporters. 

For the past few weeks rumors have spread throughout the Capitol that the extender bill would be the last bill passed by Congress before lawmakers turn their attention to the upcoming election. In such a case, members want to add pet measures to the legislation to help their chance for re-election. Levin cautioned against believing the rumors. 

"Don't listen to all the rumors," he said. 

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Senate Finance Chairman Max Baucus (D-Mont.) on Tuesday said action on a small business tax bill could occur soon and a fix for the estate tax may not be far behind it. 

"I'd like to do a small business bill soon," Baucus told The Hill, adding that talks on the estate tax will soon involve members.  

"I'll know more about the estate tax in a few more days," he said. "It's going on this week at the staff level and will on the [member] level later on this week." 

Committee and floor action on the small business bill might occur before the Memorial Day recess, an aide said.

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The Senate Finance Committee chairman tells The Hill he doesn't think there are 60 votes for a bank tax.