TAG Extension Fails to Advance in Senate Debate
- By Konstantine Kastens, Government Relations Administrator
- Published: 2012-12-13
The move to extend the Transaction Account Guarantee (TAG) program another two years failed in the Senate Thursday afternoon, following a procedural point of order brought up by Sen. Pat Toomey (R-PA). Senate rules require that a bill under consideration show not to incur new cost, and pay for itself.
TAG originated during the 2008 financial crisis to supplement liquidity and prevent bank runs, and was extended in 2010 under the Dodd-Frank Act. If Congress fails to extend the program, TAG will expire this month.
The bill amends the current program by requiring that TAG offset its own estimated losses through collected premiums, separate from those collected by the Federal Deposit Insurance Corporation (FDIC).
Introduced by Senate Majority Leader Harry Reid (D-NV), supporters of the bill contend that the program funds itself through the collected fees. However, opponents disagree that the program could fully sustain itself through fees alone. Reid brought the bill to debate Wednesday, blocking lawmakers from adding amendments to it. This move, opponents of the bill argue, forced them to raise a point of order. Short the 60 votes needed to override the budgetary point of order against S. 3637 extending the program, the bill failed 50-42 in the Senate.
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