Treasury Secretary Nicholas Brady confirmed Wednesday the administration is considering a tax on customer deposits in banks and savings and loans to pay billions of dollars toward a bailout of the thrift industry.
Brady insisted the proposal should not be viewed as a tax, but he nonetheless acknowledged in a pair of television interviews that the idea could amount to a fee of 25 cents for every $100 deposited at a federally insured institution."In my mind, that's like any other insurance premium," the secretary said on ABC's "Good Morning America" show. "If we go to that option it would be very small. Some of the suggestions are 25 cents per $100 for this very valuable insurance."
Brady stressed on NBC's "Today" show, "We haven't even spoken to President Bush yet about this. There is no plan that's signed off on by the president or recommended by the Treasury."
He argued again that any customer fee should be seen as minor, saying, "If there were to be an insurance-based premium deposit, it'd be so small nobody would notice it."
The Washington Post reported Wednesday that administration officials met privately with leaders of the House Banking Committee last week and Brady spoke with Senate Republican leaders Tuesday to discuss the proposal.
Congress gave the idea a "very chilly reception," according to the newspaper, though lawmakers recognize the need to rescue the Federal Savings and Loan Deposit Insurance Corp. from thrifts that are failing because of widespread fraud and mismanagement. The cost could be $50 billion to $100 billion.
Brady maintained on ABC, "It's just like any other insurance premium, a revenue generation for services rendered."