Desperate for Sen. Scott Brown’s vote on the financial-regulation bill, Democrats abandoned a $19 billion tax on banks and hedge funds. Gutting the bank tax, however, was by no means a final concession. In its place, Democrats simply found another way to finance their package by proposing to phase out “TARP early and requiring the Federal Deposit Insurance Corporation to collect more money from banks, especially big ones.”

More from the New York Times:

Along with the TARP provision, the newest version of the legislation would require the F.D.I.C. to hold greater reserves in its insurance fund equal to 1.35 percent of insured deposits, up from 1.15 percent by 2020, financed by assessments on banks with more than $10 billion in assets. The provision is intended to save $5.7 billion, but critics said that it amounted to a tax on big banks by another name.

“This is accounting chicanery,” says Sen. Bob Corker (R., Tenn.), a member of the Senate Banking Committee, to National Review Online. “They want to use FDIC proceeds as an offset against the budget. That really sets a dangerous precedent.”

John B. Taylor, writing in the Wall Street Journal, outlines how this will play out:

The bill creates a new resolution, or “orderly liquidation,” authority in which the Federal Deposit Insurance Corporation (FDIC) can intervene between any complex financial institution and its creditors in any way it wants to. Effectively the bill institutionalizes the harmful bailout process by giving the government more discretionary power to intervene. The FDIC does not have the capability to take over large, complex financial institutions without causing disruption, so such firms and their creditors are likely to be bailed out again. The problem of “too big to fail” remains, and any cozy relationship between certain large financial institutions and the government that existed before the crisis will continue.

“It’s a shame we are where we are,” Corker says. “So many things in this bill have little to do with financial regulation. That’s problematic and unfortunate, especially since our desire was to have a strong, bipartisan bill. It’s just ended up as overreach. The other side has pushed the envelope and used this legislation to create a lot of division in the Senate. Worse, it still does not address many of the core issues of the crisis. Once the bill got to the floor, politics took over its substance.”