A Federal Deposit Insurance Corp. program that expanded safeguards for some business and government bank accounts will probably expire on Dec. 31 after the U.S. Senate failed to advance a proposal for an extension.
A 50-42 vote yesterday on a procedural motion fell 10 short of the 60 needed to move forward on a two-year extension of the Transaction Account Guarantee Program, effectively killing it. The TAG program, introduced in the wake of the 2008 credit crisis, guarantees $1.5 trillion in non-interest bearing accounts above the FDIC’s general limit of $250,000. An extension in 2010 is set to expire at the end of the year.
The Congressional Budget Office, in a Dec. 10 report, estimated that the FDIC would be unable to cover potential losses from the program and projected that costs to the agency would extend beyond 2015. Republicans used the CBO findings to object to the TAG extension.