* Baucus: impact of tax on consumers needs study
* Inspector general says recoupment poses hard question
(Adds comments from Treasury inspector general, byline)
By Kim Dixon
WASHINGTON, April 20 President Barack Obama's
plan to tax financial institutions to recoup funds spent during
the government's bailout of financial firms received tepid
enthusiasm from the top tax writer in the U.S. Senate.
Senator Max Baucus, the conservative-leaning Democrat who
heads the Senate Finance Committee said on Tuesday he will hold
a series of hearings to examine the plan.
But he also said good news on the government's recouping of
its bailout investments may cast doubt on the need for the
funds Obama wants to raise.
"We need to learn whether banks will pass it on to
consumers, and how it might affect lending to small
businesses," Baucus said.
Obama in January proposed a 0.15 percent tax on liabilities
of big financial institutions to deter risk-taking that
contributed to the economic free fall in 2008. The government
spent billions of dollars to prop up Citigroup (C.N) , American
International Group Inc (AIG.N) and others.
The special inspector general for the Troubled Asset Relief
Program, Neil Barofsky, told the panel about progress made by
companies getting TARP funds.
Baucus said the news was encouraging and "raises the
question... of how much do we need to pay back."
Senator Charles Grassley, the ranking Republican on the
panel who is close to Baucus, asked whether it would be fair to
tax banks who repaid TARP to make up for losses sustained by
General Motors [GM.UL] and AIG.
Barofsky said it was a "difficult policy question."
Baucus said it was a question he would like to explore in
Obama's bank tax got strong backing from New York Democrat
Charles Schumer, who called for including the bank tax in the
broad financial overhaul legislation moving through the Senate.
Baucus said the idea has been discussed, but no decision
has been made.
(Reporting by Kim Dixon Additional reporting by Andy Sullivan;
Editing by Tim Dobbyn)