Senate Majority Leader Bob Dole has revived plans to tie the thrift insurance fund rescue to legislation repealing the gasoline tax and has scheduled a vote for Tuesday.
Although President Clinton has agreed to support the combined package, Senate Democrats may try to block a vote unless Republicans also allow a separate ballot on a hike in the minimum wage. With only 53 Republicans in the Senate, Sen. Dole would need at least seven Democratic votes to defeat a filibuster, if the Democrats stage one.
Recognizing that banks are likely to oppose the move strenuously, Sen. Dole characterized the thrift fund bailout as an administration-designed plan and urged the industry to direct complaints to President Clinton rather than Congress.
When he introduced the proposal last Thursday, Sen. Dole even read the White House phone number on the Senate floor , in hopes that bankers around the country were watching C-SPAN and would scribble it down.
"We are pleased to accommodate the White House when we can," the Kansas Republican said.
Banks oppose the plan because it would force them to assume $600 million in annual payments through 2017 on bonds used to bail out the thrift industry in the late 1980s. Thrifts also would pay a one-time assessment to capitalize their insurance fund.
Revenue raised by the assessment on thrifts would be used to offset the $2.8 billion cost of repealing the 4.3-cent-per-gallon gasoline tax for the rest of 1996.
Money from the special assessment is counted as budget revenue, even though the funds are actually forwarded to the Federal Deposit Insurance Corp.
By using the thrift fund fix as an offset, Sen. Dole is hoping to squelch Democratic resistance to the gasoline tax repeal, said Richard F. Hohlt, a lobbyist supporting the capitalization plan. "He's trying to pressure Democrats. He's saying to them: To vote this down, you're not just voting against the gas tax repeal, you're voting against saving the thrift insurance fund," he said.
Despite the President's support for the thrift fund bailout, Senate Minority Leader Tom Daschle, D-S.D., on Thursday balked at supporting the plan. "This is an issue that has to be resolved. We recognize that," he said. "But I'm not sure that we do it justice simply to use it as a convenient offset."
Sen. Dole's surprise move to resurrect the savings association rescue, prompted American Bankers Association chief lobbyist Edward L. Yingling to order a new lobbying blitz.
The ABA will run full-page ads in Washington newspapers Saturday through Monday and will ask members to deluge their senators with phone calls and faxes opposing the thrift fund plan.
"We will point out it does not make sense to pay for gasoline tax repeal with a provision that includes a new tax on bank deposits," Mr. Yingling said. "This gas tax reduction will last less than a year, while the bank tax will last for 20 years."
If the Senate passes the gasoline tax repeal and savings association bailout plan, the package would be sent to the House, where its prospects are uncertain. The House Ways and Means Committee passed a version of the repeal without the thrift fund fix on May 9.
Senate Finance Committee Chairman William V. Roth first floated the idea of tacking the thrift fund rescue to the gasoline tax repeal on May 3, but Republicans dropped the idea early last week in the wake of bank industry opposition.
But when Sen. Daschle objected to other offsets proposed by Republicans, Sen. Dole returned to the savings capitalization plan because it has strong backing from President Clinton.