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Democrats Propose Axing Bank Tax: Report

Legislators were reportedly working on a compromise to keep the passage of the financial reform bill on track Tuesday with a proposal to remove a big bank tax.

NEW YORK (

TheStreet

) -- Members of Congress appeared willing to compromise Tuesday in order to keep approval of financial reform legislation on track Tuesday.

According to a report from

Reuters

, Democrats supporting the bill have proposed removing an estimated $18 billion in taxes on large financial institutions that were added to the Dodd-Frank Wall Street Reform and Consumer Protection Act late in the process of reconciling the House and Senate versions of financial reform on Friday.

Instead, the legislators would look to end the Troubled Asset Relief Program early, the report said, in order to cover some of the costs of the bill's provisions.

The late addition of the bank taxes was a sore spot for Sen. Scott Brown (R., Mass.), and his continued support of the bill became more important following the passing of Sen. Robert Byrd (D. W. Va.) on Monday.

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The TARP program is currently scheduled to expire in October, and Sen. Christopher Dodd (D. Conn.) said its early end would provide $11 billion to defray finreg's costs, according to

Reuters

.

Bank stocks logged steep losses on Tuesday amid the selloff in the broad market. Among the money-center banks,

Citigroup

(C) - Get Report

was the biggest decliner, falling almost 7%.

--

Written by Michael Baron in New York.