The prospects for enactment of any major banking legislation this year have all but died, lobbyists and Capitol Hill sources said Monday.
Congress took no action on the financial services or bankruptcy reform bills over the weekend, and lawmakers were expected to tackle few major issues before adjournment this week as they await the conclusion of budget negotiations with the White House.
In interviews Saturday, lawmakers from both parties gave financial reform scant hope of Senate approval or escape from a presidential veto.
"The odds are surely against it," said House Banking Committee Chairman Jim Leach.
Though Congress has decided to extend its session into this week, Sen. Paul S. Sarbanes, D-Md., said that Senate Majority Leader Trent Lott killed the reform bill Friday when he set it aside to keep opponents from tying up all other Senate business.
Sen. Sarbanes, the Banking Committee's ranking Democrat, criticized the decision, arguing that Sen. Phil Gramm, R-Tex., would have exhausted his procedural stalling tactics by early this week and enough time would have remained for a vote.
"We were on a path that would have worked despite the opposition from Phil Gramm," Sen. Sarbanes said. "This bill should have been done. A lot of effort went into this thing."
House Rules Committee Chairman Gerald Solomon, R-N.Y., said supporters were "doing everything humanly possible" to add the measure to a catch-all spending bill that Congress must pass in order to prevent a government shutdown.
But Sen. Sarbanes and Rep. John J. LaFalce, D-N.Y., dismissed that possibility. "It would be very difficult to attach it to a spending bill," said Rep. LaFalce, the ranking Democrat on House Banking. "There are so many difficulties so many have with it."
The prospects for enactment of consumer bankruptcy reform or its attachment to the comprehensive spending bill are equally grim, industry lobbyists said.
The Senate approved a motion on a 94-to-2 vote late Friday to proceed with compromise bankruptcy legislation, but Democratic opposition is expected to block a final vote.
Even if the Senate approves the bill, the Clinton administration has made repeated veto threats.
Clinton administration officials and congressional leaders exchanged offers over the weekend, said Philip S. Corwin, a lobbyist who represents the American Bankers Association on bankruptcy issues. Details of the offers were sketchy but appear to be "cosmetic," said Mr. Corwin.
Meanwhile, Rep. Leach said Saturday that he was "very optimistic" Congress would provide $18 billion for the International Monetary Fund in exchange for increased disclosure and other IMF reforms.
The President also is expected to win an increased farm relief in the catch-all spending bill; he vetoed an agricultural spending bill last week that would have delivered $4.2 billion in aid to farmers.
Rep. Leach predicted regulatory relief for banks would get "stymied" in the Senate.
A House Banking Committee spokesman said some senators objected to provisions that would let banks pay interest on business checking accounts and permit the Federal Reserve Board to dip into its surplus to pay for interest on reserves.
The Clinton administration officially opposed the bill last week because of the $800 million price tag over five years to pay banks interest on reserves, and it criticized using Fed earnings as a budgetary gimmick.