Congress is about ready to hand a $30 billion check from taxpayers to depositors in failed savings and loan associations.
The Senate took less than a minute Tuesday night to approve a compromise bailout bill on a voice vote shortly after House-Senate negotiators worked out the compromise in less than 15 minutes.The House is expected to give the measure final congressional approval later this week.
President Bush is likely to sign the measure quickly because the agency conducting the S&L bailout has just about overdrawn its own account.
The bill would raise to $80 billion the total taxpayer funds earmarked for the bailout, which became necessary after the federal fund that insures S&L deposits was depleted. Because the government is running a deficit, the money has to be borrowed and turned over to the bailout agency, the Resolution Trust Corp.
Bush is expected to ask for an additional $50 billion next year.
The quick vote was in sharp contrast to the six days the Senate and the two days the House spent debating their versions of the legislation. But the speedy action was not surprising because the two houses agreed on the new $30 billion appropriation, disagreeing only on some relatively minor details.
The bill is not a popular one. Even though the money will go to depositors - not to investors in S&Ls - there still is widespread voter resentment about such a huge federal expenditure.
"While adopting legislation of this nature may not be popular, to those individuals who entrusted their hard-earned dollars with a failed thrift, it should provide the peace of mind that their money will be returned in full up to the statutorily prescribed amount," said Rep. Chalmers Wylie of Ohio, senior Republican on the House Banking Committee,
In addition to the $80 billion in taxpayer money, the RTC is borrowing $100 billion or so on its own to acquire the assets of failed S&Ls. The borrowed money is expected to be repaid once the agency disposes of those assets.