WASHINGTON -- For the first time in two years, Congress appears ready to approve new funding for the faltering savings and loan ballout.
An agreement this week on the politically sensitive issue of minorities and women contracting with the Resolution Trust Corp. removed one of the last obstacles to approval of the $18.3 billion package.
The agreement, which maintains minority preferences while stipulating that the provision should not increase the cost of the bailout, was brokered by Sen. Alfonse M. D'Amato, R-N.Y., and Rep. Floyd H. Flake, D-N.Y. It appears to have the support of two key groups: Senate Republicans and the Congressional Black Caucus.
However, House and Senate aides cautioned that staff negotiators had been unable to agree on language extending the statute of limitations for suits brought against officers, directors, and other individuals involved in thrift failures.
Facing Problems in Senate
As a result, lawmakers will have to work the issue out in a face-to-face meeting this week. The Senate is expected to defer to the House in negotiations, but Sen. Howard Metzenbaum -- who championed the position in the Senate bill -- could raise problems when the measure goes back to the Senate floor.
"In the full Senate, the votes are there for the Senate position," said one House aide. "The question is, are people willing to say no to an RTC bill" if the Senate position is rejected in conference?
Meanwhile, House leaders are nervous about the prospect of a second floor vote on the issue.
The bill passed by a just six votes earlier this year, and backers in the House want a few days to shore up support before going to another vote.
The measure provides $18.3 billion for the RTC and authorizes $8 billion for the fledgling Savings Association Insurance Fund. Because the money for the fund is contained in an authorization, rather than an appropriation, lawmakers would have to vote on it again before it could be spent.
The last time Congress voted money for the RTC was in November 1991, when it appropriated $25 billion. But that money was subject to an April 1, 1992,cutoff, and the agency had spent only about $6.7 billion by that date. The RTC has essentially been broke since then.
The Senate bill would have appropriated $8.5 billion that could have been used right away by the insurance fund. However, in the face of the tight House vote, Senate negotiators acquiesced to the House.
On the statute of limitations. the Senate bill would have extended the time period for bringing suits to a full five years after the alleged violation. However. it would apply retroactively, to cases in which the statute had already expired.
The House version essentially, sets up three categories of tort actions. In the first, involving simple negligence, the limit is the greater of the applicable state law or the three years prescribed under federal law.
The middle category, in which an individual is found to have acted with gross negligence, would be subject to a five-year statute of limitations. For those accused of intentional misconduct, the five-year statute would apply retroactively.
Some observers believe Sen. Metzenbaum may be willing to let the bill go through with the House language and try to add his amendment to the pending crime bill.