WASHINGTON — Momentum to tax the largest banks continued to build Tuesday as Treasury Secretary Tim Geithner endorsed adding such a provision to regulatory reform legislation.

Bankers may be unable to stop a tax if it does get added to the legislation because Democrats view it as a way to ensure the reform bill saves the government money and Republicans consider it politically risky to oppose.

"We think there's a good case for doing it as part of financial reform," Geithner said at a Senate Finance Committee hearing.

Geithner was backed up by Sen. Charles Schumer, who said the tax, dubbed the "financial crisis responsibility fee," would prove that banks will cover the cost of the government bailouts.

"The financial crisis responsibility fee sends an important message to taxpayers that we mean what we say," Schumer said. "When the law requires the financial industry to pick up the tab for rescuing the economy, created in part by the problems of the financial industry, we followed through and got our money back … . It makes common sense to put this in the banking bill, in the regulatory reform bill." The White House has privately pressed to include a bank tax in the reform bill but did not publicly support this until Tuesday.

Efforts to include the provision have gained ground since Democrats agreed to jettison a proposed $50 billion fund to pay for future bailouts. The fund had led the Congressional Budget Office to predict that the reform bill would save the government more than $20 billion over 10 years. Without it, the bill would actually cost money. Adding a bank tax would whittle down the expected costs.

President Obama first proposed the tax in January to recoup $90 billion over 10 years on losses projected for the Troubled Asset Relief Program. It was to be a 15-basis-point fee on the liabilities of financial institutions with more than $50 billion of assets.

At Tuesday's hearing, Republicans tried to reshape the debate by opposing a bank tax on grounds that it was being considered too early to know the full extent of Tarp losses and that it could deter small-business lending.

"I am convinced this tax will ultimately harm small business through higher costs for borrowing or reduced access to credit or that the tax will not be passed on to and paid by consumers," said Sen. Pat Roberts, R-Kan. "By some estimates, the bank tax could remove up to $1 trillion in lending." But Geithner disputed the claim, saying it was unlikely to affect lending.

"This fee only applies to less than 1% of American financial institutions," he said. "And for that reason, I think it's very unlikely to have any impact on the ability of small businesses to get credit at affordable rates."

Republicans also questioned why the tax should be imposed now, when the Tarp law gave the administration until 2013 to present a plan for recouping losses.

"Can you understand why it looks suspicious that the administration is submitting the plan now when the Tarp losses aren't fully known?" asked Sen. Jim Bunning, R-Ky. "Can you understand why this looks like a political stunt to distract the public from the very unpopular Tarp program and a transparent attempt to make it look like the administration is not in the back pockets of Wall Street?"

The Treasury secretary said acting now would bolster markets' confidence. "If we waited, we would have left the world with a lot more uncertainty about whether we would have the will to cover those losses … ; clarity now is responsible and reassuring," Geithner said. "Delay is neither necessary nor desirable at a time when people are worried about our political capacity as a country to help dig our way out of the fiscal damage caused by this crisis."

Democrats widely supported the fee, and some even suggested making it permanent.

"Why don't we consider both an ex-post fee, which is what you've proposed to recover Tarp outlays, and also a so-called ex-ante levy to deter risk-taking at the expense of taxpayers going forward?" asked Sen. Jeff Bingaman, D-N.M.

But the Treasury secretary said an ex-ante fee would create moral hazard. He also dismissed the House approach to base the tax on income, as opposed to liabilities.

The industry continues to fight the proposed levy. John Sorensen, the president and CEO of the Iowa Bankers Association, told the committee that the tax would be unfair to bankers.

"To charge banks for losses generated by nonbanks and other administration programs would be unfair and, I believe, inconsistent with the spirit of" the law that created Tarp, he said. "The proposed fee accomplishes little in the way of altering behavior that caused the financial crisis. The country would be much better served by focusing on how we maintain a dynamic and responsible financial sector where the rules of the game are consistently applied to all players."

But Geithner and Democrats said the fee should be levied only on banks, not auto companies and the government-sponsored enterprises.

"Tarp helped to keep the financial sector afloat," committee Chairman Max Baucus said. "And there's a decent argument that the financial sector received more benefit from Tarp than just the dollars that Tarp lent them."