WASHINGTON - Treasury Secretary Robert Rubin conceded Wednesday that practical politics may stand in the way of the administration's goal of letting banks and insurance companies into each other's businesses.
"The insurance issue has always been knotty politically," he said. "It might be more difficult to deal with it in the early stages rather than the later ones."
Nevertheless, the Treasury chief made it clear that the administration still favors broadening a pending Glass-Steagall measure to include insurance issues and expressed hope that Congress would agree.
Speaking at a breakfast session sponsored by the Center for National Policy, a Democratic-leaning think tank, Mr. Rubin said that it may be best to avoid the insurance issue now "for tactical reasons."
But "a Congress dedicated to a thorough review of government regulations should include insurance in financial modernization before that Congress finishes its work," he added.
The House Banking Committee is scheduled to begin consideration Tuesday of legislation that would repeal the Glass-Steagall Act's separation of the commercial and investment banking industries.
Banking Committee Chairman Jim Leach, the bill's sponsor, is opposed to efforts to broaden the bill to include insurance issues. Even if Rep. Leach succeeds in blocking insurance amendments, however, the House Commerce Committee - which also has responsibility for the bill - could take them up.
In his comments Wednesday, Mr. Rubin cited the Glass-Steagall bill as a top administration priority and expressed optimism that the measure could pass Congress.
"There is real potential for the first time in a long time to get a good bill through Congress," he said.
In other comments, Mr. Rubin vowed to fight any legislative effort to rewrite the Community Reinvestment Act and blasted legislation that would eliminate funding for community development financial institutions.
Although the regulatory agencies only recently finalized new regulations aimed at easing the burden of complying with the reinvestment laws, "already there are proposals that would substantially weaken CRA," Mr. Rubin said.
The administration will "vigorously fight" any effort to revamp the law, he added.
The Center for National Policy has become a favored site for the Clinton administration's banking policy announcements. Early in the administration, former Treasury Secretary Lloyd Bentsen used a lunch sponsored by the center to outline the administration's major banking initiatives for the first two years.