WASHINGTON - Government witnesses on Wednesday threw their weight behind legislation that would merge the bank and thrift deposit insurance funds, but they objected to the industry's wish list of add-ons, such as a premium rebate.

"The timing for a merger could not be better, given the current health of the bank and thrift industries and the condition of the funds," Federal Deposit Insurance Corp. Chairman Donna A. Tanoue testified before House Banking's financial institutions subcommittee. "A merger is unequivocally in the best interest of the American taxpayer."

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