CBO: Financial overhaul would hike deficit by $4.5 billion

A wide-ranging House bill to crack down on Wall Street and revamp the nation's financial markets will increase the nation's deficit by $4.5 billion over the next decade, according to the Congressional Budget Office (CBO).

The nonpartisan CBO said late on Friday that the effort between 2010 and 2019 would increase revenues to the federal government by $4.9 billion and increase spending by $9.4 billion. The package would have its biggest fiscal impact between 2010 and 2014, when budget deficits would increase by $10.7 billion, CBO said.

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The bill, expected to pass by the end of next week, comes a year after the country witnessed the worst financial crisis since the Great Depression.

Congress passed a $700 billion bailout last year to support the financial industry, while the Federal Reserve has pumped trillions of dollars into the economy to stabilize markets. President Barack ObamaBarack Hussein ObamaMore than 400,000 people barred from becoming citizens due to coronavirus: report Poll finds public evenly split on delayed Supreme Court ObamaCare decision Samantha Power: UN covering up Russia's role in Syria bombings MORE made revamping the regulatory system a top domestic priority this year, with administration officials strongly urging lawmakers to pass reforms.

The House is expected to vote on the package of changes by the end of next week. House Financial Services Committee Chairman Rep. Barney Frank (D-Mass.) is spearheading the legislation, which aims to reduce risk across the financial system, restrict the multi-trillion dollar derivatives market and boost consumer protections, among other changes.

Under the bill, the Federal Reserve would take in $400 million in fees for examining banks with at least $10 billion in assets, CBO reported. The new mechanism to dissolve failing financial institutions would increase spending by $5.7 billion and increase revenues by $3.7 billion over the period.

"CBO expects that the probability of such receivership activities would be small and that spending for losses and working capital would eventually be offset by recoveries and assessments," the office said in its analysis.