US Republicans object to tax on financial institutions

| June 30, 2010
US Republicans object to tax on financial institutions

US Democrats have been forced to revise their reform of the US financial sector after some Republicans are not in full support of a controversial tax on financial institutions.

The reforms will impose strict limits on banks’ ability to take risky speculative bets on markets and were added during a 19-hour negotiating session by House and Senate legislators late last week, to cover the costs of the bill.

One Republican in particular, Senator Scott Brown of Massachusetts, has said he would withdraw his support unless Democrats strip out the $17.9 billion (£11.9 billion) tax that would apply to large financial institutions.

It was expected US President, Barack Obama, would sign the legislation into law by 4 July but without Senator Brown‘s support, Democrats have no Republican votes for the package.

Following the death of Senator Robert Byrd on Monday, they are now two votes short of the 60 required.

Democratic Senator Christopher Dodd said he is reviewing alternatives to the tax and has reopened negations, and is considering a proposal to bring a $700 billion bank bailout scheme to an early end to fund the reforms.

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