Paying for the S&Ls

October 16, 1990

Having exacerbated the current savings and loan debacle with its earlier penny-pinching ways, Congress can ill afford to delay finding the money requested by the Bush administration to clean up the nation's enormously expensive S&L mess.

Failure once again to give federal regulators the cash they need to seize bankrupt thrifts would only prove more costly for U.S. taxpayers in the long run.

Regulators are seeking an additional $40 billion to keep the cleanup going. That's in addition to $50 billion provided last year. Nearly all of the original outlay has been spent taking over the worst of the S&L disasters.

Hundreds of other red-ink S&Ls still must be seized, assets sold off and depositors made whole. Regulators also want to revise 1988 takeover deals that provided new S&L owners with lucrative government subsidies; these modifications could cost $22 billion now but save $4 billion during the decade.

Senate Banking Committee members swiftly backed the administration request last week, but their House counterparts are balking. Yet no one in the House has come up with a better idea for underwriting the S&L bailout. They're just mad about spending all this money on failed thrifts.

Anger over the savings and loan debacle is understandable. Yet House members seem to forget that they helped deepen the S&L "black hole" years ago by adamantly refusing to give regulators enough money to meet this problem head-on. They cannot to make that mistake again.

For once, the administration is acting responsibly in dealing with the nation's savings and loan mess. It's time for Congress to act responsibly, too.

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