WASHINGTON -- While attacking Congress for delaying spending authority for the savings and loan bailout, the Bush administration has squirreled away more than $2 billion to keep the operation going.
Most members of Congress, which approves appropriations for the Resolution Trust Corp., the agency that oversees the bailout of the savings industry, had assumed that the corporation ran out of money April 1.
Administration officials have said on many occasions that the RTC was out of money, and they, as well as officials of the corporation, had not disclosed the existence of the fund for fear that news of it would reduce any sense of urgency that could impel congressional action.
Asked by a reporter what effect the stalemate over appropriations has had on the corporation's operations, the administration officials disclosed the existence of the fund. They said that the $2 billion came from an earlier spending measure and was enough to keep the agency going for a few months.
"I hate to say it, but $2 billion is not a lot of money," said Stephen Katsanos, a spokesman for the trust corporation.
The money was set aside last fall by the corporation because it feared that political gridlock on Capitol Hill would delay replenishment of its funds. The $2 billion has enabled the corporation to continue selling assets and seizing additional savings institutions since April 1, when most of its spending authority expired.
For all the secretiveness, there has been no suggestion of wrongdoing. Some members of Congress said they were surprised but not upset to learn about the money.
Congress will return tomorrow from a two-week recess but has shown no inclination to move quickly to provide new money. Some lawmakers and regulators said it could be weeks, or longer, before the trust corporation is given new money, and it is clear from their comments that the partisan bickering will continue.
Always a difficult political issue, financing the highly unpopular bailout has run into a brick wall, even though everyone acknowledges that Congress will have to provide more money. Bickering between the administration and House Democrats this election year, combined with an internecine Republican struggle, has blocked quick passage.
The administration says the House should provide more money. Democratic leaders say they will not seek Democratic votes until the administration enlists strong Republican support, so that the Democrats cannot be singled out as the driving force behind the financing.
The regulators said they debated the tactical merits of setting up the $2 billion fund, ultimately deciding the fund would be needed because Congress had previously delayed acting on spending measures.
"If you wanted to play brinksmanship, this was unwise," said one senior bailout official who asked not to be identified. "But if you wanted sound policy, this was the only way to go. So the agency decided to squirrel away some money, which is now down to about $2 billion."