In the midst of the mark-up mayhem, it’s easy to miss an important development that will have far-reaching impact. In its first judgment on a financial-reform bill, CBO smacked the derivatives measure with an $872 million four-year price-tag. The reasoning CBO used applies to much of the rest of the reform package, meaning the bill has big-time budget costs. Under pay-go, these must be offset. Thus, we think the financial-transaction tax will re-emerge as yet another major industry challenge.

We last looked at the transaction tax in late September, sparked by then-simultaneous calls for it from Paul Volcker, the German Finance and Foreign Ministers and the head of the FSA. The most concrete of these proposals came from Germany, which asked the G-20 summit to endorse a tax of 0.05 percent on all on- and off-exchange traded equities, bonds and derivatives. This would rack up $690 billion from the G-20 nations, with the biggest hit falling on the U.S. and U.K. where most of this trading is done.

So far, a U.S. version of the transaction tax hasn’t taken off, but that’s not to say it isn’t an idea in play. It’s a longstanding liberal proposal, last seen as a way to finance TARP. It didn’t gain much traction then, in part because Congress of course took up TARP at the height of the market crisis when budget niceties were far from its top priority. Now, though, budgeting is a big Congressional preoccupation.

Thus, we do not expect Congress again to look the other way when CBO slaps a big number on a banking bill. It will instead need to find a way to make the legislation at least budget-neutral.

How much will need to be raised to offset the reform bill is a long way off, but CBO estimates that each stage of the process will put a lot of heat on members. As each part of the complex package is crafted, offsetting costs and revenue-raisers will need to be totalled up to ensure an ongoing picture of the pay-go problem. Some parts of the package will take away – see the CBO number for derivatives reform – and others will give – we expect CBO to score a little-noticed provision to end exemptions to SEC registration requirements as a big revenue-raiser. A hundred million here, a hundred million there and so on will be figured out as each piece of the bill is finalized and then rejiggered when the House package is finalized and the Senate measure pulls together.

All of this has a long, long way to go. But, we already know one certainty from the pre-payment battle: anything anyone says that will cost Treasury, not banks, won’t go anywhere without an offset. That offset may come first from other pieces of the package, but if there isn’t enough there, Congress will go straight to banks and look with favor on the transaction tax.