WASHINGTON -- The House Banking Committee's subcommittee on financial institutions voted Wednesday to put the thrift bailout on a pay-as-you-go financing plan.
The panel voted 18-17 to amend the Bush administration's legislative proposal to refinance the Resolution Trust Corp.
Sponsored by Rep. Joseph Kennedy, D-Mass., the amendment would authorize the RTC to borrow $20 billion but direct the president and Congress to come up with a package of budget cuts or tax increases to finance additional RTC spending.
Issue Delayed Earlier Action
Haggling over the pay-as-you-go issue had delayed congressional action last spring on an earlier administration RTC refinancing request.
Rep. Chalmers Wylie of Ohio, the subcommittee's ranking Republican, said his inability to defeat the amendment this time around portends a long a bitter fight. One Republican, Rep. Toby Roth of Wisconsin, backed Rep. Kennedy. A handful of senior Democrats, including Rep. Doug Barnard of Georgia and Rep. Charles Schumer of New York, supported Rep. Wylie.
"If we can't win on this amendment, we can't win on anything. This is ugly," Rep. Wylie said. He said he will later offer an amendment that would forbid raising taxes to pay for the bailout.
Rep. Kennedy argued that paying for the bailout from current accounts could save up to $145 billion in long-term interest bills. "Government by Gold Card is bad government practice," he said.
The Bush administration opposes the amendment, but the House Democratic leadership is divided. Speaker Thomas Foley, D-Wash., supports the Treasury in opposition. But Majority Leader Richard Gephardt, D-Mo., views the measure as a potential platform to highlight GOP and Democractic differences.