WASHINGTON - In the wake of weak support among Democrats, the House of Representatives now appears likely to delay action on new funding for failed thrifts until after the July 4 break.
A tally by party leaders this week found no more that 150 Democrats who were ready to vote for the measure, a number of sources said.
As many as 200 Democratic votes may be needed to carry the measure, since few Republicans are expected to support it.
One lobbyist working on the $34 billion funding package said an unusually large number of Democrats indicated they were undecided or unwilling to disclose their position.
Turning the Tide
"Our job now is to turn the |no responses' into |yeses,'" said this lobbyist.
The bill could still be called up for a vote next week if enough support is garnered. However, most observers think action before July is unlikely.
Meanwhile, a number of trade groups, including the American Bankers Association, the Independent Bankers Association of America, and the National Association of Home Builders, signed a letter urging lawmakers to support the bill.
"The federal government has an obligation to honor its commitment to depositors under the federal deposit insurance program," the trade groups argued.
"To deny funding would send a dangerous signal to depositors." they added in the letter. "It would also generate a shock wave which would be felt throughout the financial system ... with unfortunate side effects for business expansion and job growth."
The bill approved by the House Banking Committee would release $18.3 billion in previously authorized money for the Resolution Trust Corp., which is overseeing the thrift cleanup.
It would also provide up to $16 billion for the fledgling Savings Association Insurance Fund, provided a series of tough conditions are met.
Lure of RTC Money
However, one prominent Republican, Rep. Richard Baker of Louisiana, is attempting to build support for a more narrow approach that deletes the SAIF funding but permits the thrift fund to tap money not used by the RTC.
The Baker initiative could have a shot at passage if the banking committee bills fails on the floor.