Congressmen OK Bill to FInish S L Bailout
WASHINGTON (AP) _ Legislation providing a final installment of up to $26.3 billion to finish the savings and loan cleanup narrowly cleared the U.S. House of Representatives on Tuesday after months of partisan bickering.
The bill, adopted 214-208, must be reconciled with similar but more expensive Senate-passed legislation. Any compromise would then have to be returned to both chambers for final approval before it is sent to President Clinton for his signature.
"The House has taken an important step . . . but the job's not over until this legislation receives final approval. Only then can we close out this sad chapter in America's financial history," said Treasury Secretary Lloyd Bentsen.
The House measure appropriates $18.3 billion for the Resolution Trust Corp. to shut down 71 insolvent thrifts it is keeping open for lack of money to protect depositors and for any further S Ls that fail before April 1, 1995.
It authorizes up to $8 billion more, under certain conditions, for failures through 1998, which will be handled by a new Savings Association Insurance Fund.
If all the money is spent, it would bring the total taxpayer cost of the cleanup since 1987 to $158 billion.
Supporters of the bill, Democrats and some Republicans, argued it was the last dose of a painful medicine needed to cure the worst financial debacle since the Depression.
They said it would reassure nervous depositors and end $3 million a day in losses that have accrued since the RTC ran out of spending authority in April 1992 and was forced to operate insolvent S Ls.
"Not only would it be unconscionable for us to go back on promises to depositors . . . but it could also lead to financial panic. If people actually believed we weren't going to provide this money, you'd see runs on banks. We can't risk something like that," said Rep. Stephen Neal, D-N.C.
Opponents, however, likened giving money to the RTC, which they called "a rogue animal" and "a bureaucratic nightmare. …