WASHINGTON -- President Clinton's deficit reduction bill, which faces key votes on Capitol Hill today and tomorrow, is a mixed bag for the banking industry. But the package promises genuine relief in one area crucial to lenders -- the nation's flagging real estate markets.

The bill reinstates deductions for passive losses by real estate professionals and permits pension funds to invest more freely in real estate investment trusts, or REITS. It also eliminates a tax barrier to restructing loans secured by real estate.

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