Republican leaders Wednesday launched a last-ditch effort to enact a Savings Association Insurance Fund rescue this year.

House Majority Leader Richard Armey and Senate Majority Leader Trent Lott met yesterday to decide what legislation will be attached to an omnibus spending bill that must be passed before Congress adjourns on Sept. 28.

Industry sources said the thrift fund fix has made the cut, although nothing is final yet. The SAIF rescue also could be attached to other bills, for example, the Defense Department's appropriation.

Congressional budget negotiators are eying the insurance fund capitalization plan because it raises roughly $3.7 billion that can offset the cost of other government initiatives.

To craft a package that banks and thrifts will support, Rep. Jim Leach and Sen. Alfonse M. D'Amato, chairmen of the banking committees, talked by phone Wednesday.

"Our two committees have been engaged in a constructive dialogue to bring the banking agenda to fruition," Rep. Leach said. "Central in the discussion is regulatory relief and the SAIF plan.

"I am very optimistic about a positive result."

Still, industry lobbyists were scrambling and the more changes sought, the less chance the measure has of passing.

For example, some individual thrifts are asking lawmakers to force banks to pay the bulk of payments on Financing Corp. bonds in 1997, rather than delaying the cost for three years as in Rep. Leach's bill.

"There have been institutions that have hated the delay from the beginning," confirmed Paul A. Schosberg, president of America's Community Bankers.

The American Bankers Association vowed to fight if the spending bill does not include regulatory relief and exempt banks from borrowers' environmental liability.

"If we don't get the right package, we'll try to kill it," said Edward L. Yingling, ABA chief lobbyist. "If the bill is controversial, it's going to go down."

But additions to the bill face long odds, sources said.

The Clinton administration is pushing for a stripped down bill, one that only fixes the thrift fund while congressional Democrats have vowed to block any regulatory relief package that rolls back consumer protection rules.

Besides, environmental liability protection is opposed by House Commerce Committee Chairman Thomas Bliley. The Virginia Republican wants a deal with that provision next year, when he plans to rewrite the Superfund law.

Until Tuesday, industry sources were hopeful a SAIF/regulatory relief package could be enacted on its own. But that prospect faded when the House Rules Committee canceled a vote on Rep. Leach's bill. Sen. D'Amato's version of the bill must have unanimous support to reach the floor quickly.

Karen Shaw Petrou, president of ISD Shaw, argued the thrift fund fix is too controversial to pass, even buried in the spending bill. "I think it will be difficult to cobble something together," she said.

- Olaf de Senerpont Domis contributed to this article.

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