Ducking and running in D.C.

April 22, 1992

Washington's political Establishment has taken careful aim and shot itself in the foot in its latest razzle-dazzle over the largest financial scandal in the nation's history -- the savings and loan mess costing hundreds of billions and still climbing. If the injury were confined to the mismanagers of government, the republic would get along just fine. Unfortunately, that bullet has ricocheted and is heading right for the taxpayers.

For months, Congress and the White House knew there would have to be new legislation by April 1 to supply the agency charged with the S&L clean-up with more funds to close down failing thrifts and sell off their over-valued assets. But April Fools Day came and went without action to replenish the Resolution Trust Corp. Surely something would be done before the congressional spring break began in mid-April? After all, the delay was costing $2.5 million a day -- an estimated $200 million overall. But that's peanuts to a government adding $1 billion every day to the national debt. So, again, nothing happened.

It is a matter of faith mixed with reason inside the beltway that the S&L problem someday, somehow will be dealt with. There still are thrifts out there that have to be liquidated or merged with stronger financial institutions. They have on their books hundreds of billions of dollars in real estate properties and other assets that have to be sold off or taken over in the deals the RTC negotiates.

But every politician knows the S&L mess is poison. Though Congress was part of the problem when it lifted regulations and let fast-buck operators go wild, it has no stomach to be part of the solution. So, rather than go home over Easter to face voters asking why they again voted money for the S&L bailout, members of Congress thought the better part of cowardice was to do nothing.

Some lawmakers objected to tougher RTC oversight; others sought easier rules to save tottering thrifts. But most just wanted to run away from the issue, and the White House facilitated the process by being equally skittish. Senate Republicans tended to be on one side; House Republicans on the other. Democrats were all over the lot but united in refusing to put their heads above the wall until Republicans were up there with them. Congressional leadership vanished.

The stalemate over the S&Ls is symbolic of what is happening in Washington during a year in which a national election, the House bank scandal and recession converge. It is not a pretty picture.

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