Delivering a second dose of bad news, House Ways and Means Committee Chairman Bill Archer predicted Wednesday that legislation to protect thrifts from $3 billion in back taxes will not be enacted this year.
The Texas Republican told an America's Community Bankers conference here that the bill suspending "recapture" of tax breaks thrifts received for bad-debt reserves would have to be part of a broader tax bill sure to be vetoed by President Clinton.
Thrift executives were still reeling from House Banking Committee Chairman Jim Leach's bombshell on Tuesday in which he predicted that Congress would not bail out the thrift insurance fund this year.
Adding to the bleak outlook for a congressional bailout of the Savings Association Insurance Fund, Rep. Marge Roukema, R-N.J., told the conference Wednesday she agreed with Rep. Leach.
"Whether or not we can get it to the House floor for a positive vote is highly problematic," said Ms. Roukema, who is chairwoman of the House Banking Committee's financial institutions subcommittee. However, the lawmaker said she was committed to "keep working on this problem."
Rep. Archer said the bad-debt recapture measure would have to be attached to "a major tax bill or package." However, Rep. Archer conceded that the possible legislative vehicles he had laid out - a debt ceiling bill or a comprehensive rewrite of the tax code - faced slim odds of passage during this Congress.
"Odds are very much against the President signing" a major tax bill, and passage of a debt ceiling bill is "doubtful," he said.
Rep. Archer warned against moving the legislation as a free-standing bill, arguing that the Senate would attach undesirable amendments.
The bill, introduced by Rep. Archer last year, is key to the thrift industry's support of the thrift fund bailout and the ancillary issue of merging the bank and thrift charters, said Paul Schosberg, president of America's Community Bankers. Currently, thrifts that convert to commercial banks must pay back taxes on the reserves.
"Thrifts are going to be writing an enormous check to capitalize SAIF, and it's unthinkable that they would have to write another check for the charter conversion," Mr. Schosberg said.
