WASHINGTON -- The House yesterday passed a bill authorizing the District of Columbia to issue $332 million of deficit bonds and providing Mayor Sharon Pratt Dixon with enhanced powers to cut back the city's independent agencies.

The bill now goes to the Senate Governmental Affairs Committee, where members hope to act on the measure and send it to the Senate floor for approval by the end of the week, said John Belferman, a committee aide.

Action must be completed by this weekend, when Congress leaves for its month-long Labor Day recess, to avoid any "complications" in implementing the deficit financing and the mayor's plans to lay off unneeded "middle management workers" from the district's bureaucracy, he said.

If passage is delayed, the district "might be in the situation of having to issue short-term notes" to finance its huge operating deficit, said Dennis Smith, an aide with the House District of Columbia Committee.

The $332 million of 12-year deficit bonds that would be authorized by the legislation are designed to finance current expenses at a lower cost than short-term notes, while buying time for the mayor and city council to carry out their budget-cutting plans. The district already issues about $100 million a year of short-term notes.

In urging the House to approve the bill yesterday, Rep. Thomas J. Bliley, R-Va., said he reluctantly agreed to go along with the long-term deficit financing plan because it is needed to avert a "financial crisis" and because it is linked to the mayor's rigorous budget reforms.

The deficit bonds are "not good fiscal policy and should never be used unless the city is on the brink" of a crisis, he said. But Ms. Dixon had few other choices, he said, because mismanagement by former Mayor Marion Barry had indeed left the city "on the edge of catastrophe."

Rep. Bliley warned city officials that they should not expect Congress to approve any further deficit financings if they fail to get the district's swelling deficit under control this year. He also suggested that any repeat of the deficit financing could run into trouble in the bond market, which is "always the final arbiter of such actions."

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