Bush Unveils 4-Point Plan to Rescue S

President Bush today unveiled a four-point program financed in part by $50 billion in government bonds to shore up the ailing U.S. savings and loan industry that would not impose direct fees on depositors but would raise the insurance premiums paid by both banks and S&Ls.;

“We intend to restore our deposit insurance system to complete health. . . . We will see that the guarantee to depositors is forever honored,” he told a news conference.

Bush said his plan will address economic difficulties faced by the savings and loan industry but will take into account that “unconscionable risk-taking, fraud and outright criminality” had been factors in the crisis.

The plan would:

--Create a financing corporation to issue $50 billion in government bonds to shore up failing institutions.

--Put the estimated 350 insolvent thrifts under joint control of the Federal Deposit Insurance Corp., which oversees commercial banks, and the Federal Savings and Loan Corp.

--Overhaul the regulatory system to give the FDIC the sole authority to insure and set standards for thrifts, and give it authority to increase premiums paid by institutions.

--Add $50 million to the budget of the Justice Department to “seek out and punish” those responsible for criminal mismanagement of thrifts.

The President started by saying that savers have never lost one dollar in insured institutions and “I am determined that they never will.”

Last week, Bush said he could not rule out an “option” presented to congressional leaders by Treasury Secretary Nicholas F. Brady that called for charging depositors a fee of 25 cents for every $100 deposited to help finance the bailout.

Today, the President said he has ruled out a solution that would be paid for through such a fee. Under questioning, however, he acknowledged that he could not predict whether the institutions will pass on their increased insurance costs to consumers.

Insurance premiums are currently 83 cents per $1,000 for banks and $2.08 for S&Ls.; Bush indicated that the increase for banks will be less than 70 cents per $1,000. He did not immediately discuss the increase for S&Ls.;