S&L bailout fund boost dies amid finger pointing

April 10, 1992|By Keith Bradsher | Keith Bradsher,New York Times News Service

WASHINGTON J — WASHINGTON -- Efforts to get more money for the savings and loan bailout collapsed yesterday amid partisan finger pointing over who was to blame for the delay -- congressional Democrats or the White House.

With the lawmakers leaving for a two-week recess, the failure to act could cost the taxpayers as much as $200 million, according to administration estimates.

Democrats contended yesterday that President Bush and Treasury Secretary Nicholas F. Brady deliberately allowed the legislative deadline to pass so as to blame Congress for inaction on another issue and to avoid the politically unpopular step of disposing of more failed savings and loans.

The Democrats focused on the lack of administration lobbying and the absence of a specific proposal from the president, which House Democrats had requested.

"Had the president sent the letter, had Secretary Brady done some personal lobbying, it might have made a difference," said Rep. Charles E. Schumer, D-N.Y., a member of the Banking Committee.

But Gary Foster, a White House spokesman, rejected those criticisms. "It is absurd," he said. "It is Congress' responsibility to get this thing through."

Rep. Jim Leach, an Iowa Republican who is a senior minority member of the Banking Committee, said that Democrats should have been willing to push through legislation on their own.

He contended that deregulatory legislation passed by Democrats a decade ago had allowed savings and loans to get into trouble and made the bailout necessary.

"For the Democratic Party, which has a 102-seat plurality over the Republicans in this House, to blame the Republican Party for failure to pass legislation to correct a problem that is disproportionately a Democratic responsibility, defies explication," he said.

Resolution Trust Corp., the federal agency charged with disposing of institutions taken over by the government, halted work on April 1 because its authority to spend money expired and $17 billion remaining from money authorized in December was frozen.

The Senate approved a bill on March 27 that would have removed the April 1 deadline for spending the $17 billion and would have authorized the additional $25 billion. The House took up only the deadline issue, rejecting, 298-115, on April 1 a bill that would have eliminated it.

Agency officials say that the delay has cost $2 million a day but that by early next week, $200 million will be added to the cost of the bailout, because audits and bidding procedures would have to be redone for institutions awaiting sale.

The main mystery yesterday was why Mr. Bush has not responded to a letter last week from Rep. Henry B. Gonzalez, D-Texas, who heads the Banking Committee. Mr. Gonzalez asked for the administration's position and said the committee would draft new legislation to send to the House floor the day after the president's reply arrived.

Mr. Gonzalez scheduled a meeting of the banking panel for last Tuesday, but he postponed, then canceled it as he awaited a response.

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