Following bickering between lawmakers and the Bush administration, the House banking committee Tuesday approved spending $10-billion through February to continue the bailout of the savings and loan industry _ rejecting the administration's request for $40-billion. The authorization came after disagreements between the committee chairman, Rep. Henry B. Gonzalez, D-Texas, and Treasury Secretary Nicholas F. Brady that have centered less on the substance of the financing than on its politics, coming so near the Nov. 6 elections.
Two weeks ago, after virtually no debate, the Senate banking committee approved the administration's $40-billion request.
If Tuesday's measure is ultimately approved by the House and Senate, the Bush administration would have to go back to Congress early next year to seek more funds. That would be more politically palatable because it would occur after the elections.
The Resolution Trust Corp. (RTC), the federal agency that oversees the bailout, is virtually out of cash, and regulators have told Congress that they will be forced to a substantial slowdown in the pace of resolving the financial plight of scores of institutions unless they receive more money.
In response, the Bush administration proposed $40-billion for the next 12 months. But in recent weeks it has steadfastly refused to send a representative to Congress to explain before the cameras how it wants to use this money and how the bailout has been faring.
While they acknowledge that new financing is imminently needed to keep the costs of the bailout from further increasing, neither Democrats nor Republicans want to be blamed by voters for providing more money for a cleanup that has been roundly criticized for being too costly, inefficient and wasteful.