House Rejects Bill to Fund S&L; Bailout : Thrifts: The vote reflects dissatisfaction with the Resolution Trust Corp. The agency could be forced to shut down.

The House on Tuesday night rejected a bill that would have pumped another $30 billion of borrowed taxpayer money into the bailout of depositors in failed savings and loan associations.

The bill, written by a bipartisan majority of the House Banking Committee and supported by the Bush Administration, failed on a 220-201 vote.

Also defeated were two similar proposals, one from each party, that would have provided the additional money but reflected congressional dissatisfaction with the way the Resolution Trust Corp. is managing the bailout.

The House shouted down a substitute that would likely have required that future bailout funds come from a tax increase or by cutting other government programs, rather than through borrowing. That provision, sponsored by Reps. Jim Slattery (D-Kan.) and Joseph Kennedy (D-Mass.), demanded that the Administration spell out in advance how the money would be raised.

Financing the $30 billion through a tax increase would cost taxpayers an average of $330 each.

The Democratic proposal was defeated 303-121, the Republican counterpart lost 235-190 and the Kennedy-Slattery proposal fell 237-186.

The agency has said it will have to suspend operations within a few days unless more money is forthcoming. The corporation has spent most of $50 billion in taxpayer money that was appropriated last year. Another $100 billion is being borrowed directly by the corporation to buy assets of failed S&Ls; and will be repaid when those properties are sold.

After the vote, White House press secretary Marlin Fitzwater telephoned a statement to reporters, saying, “The President is disappointed that the House tonight failed to pass the resolution trust legislation.”

“It costs the taxpayers nearly $8 million for every day that Congress delays this action,” the statement said. “America cannot afford unnecessary costs in solving the thrift problem, and Congress should not go home this weekend without financing the resolution trust.”

Estimates of the final taxpayer costs of the bailout, including interest over the next 30 years, have been put as high as $500 billion.

The Senate voted last week to grant the additional $30 billion, which the agency said will allow it to continue shutting down failed institutions during the next 6 1/2 months.

Having rejected its own bills, the House may have to turn to the Senate measure to keep the bailout going.

Rep. Henry B. Gonzalez (D-Texas), chairman of the committee, said there were few options left, saying he could think of nothing “as distasteful, as politically unpalatable” as having to pour more money into the bailout.

“Rather than give the RTC another $30 billion, the agency should be required to sell the assets it holds,” said Rep. Frank Annunzio (D-Ill.), chairman of the financial institutions subcommittee. “When do we require the RTC to use its money rather than the taxpayers’?”

The agency has sold about half the $300 billion of assets it has taken from failed S&Ls.; Many members of Congress insist that the property should be disposed of far more quickly.

Much of the debate Tuesday centered on provisions in Gonzalez’ substitute bill that would have set a goal of awarding 25% of the bailout agency’s contracts to companies owned by women and minorities. Another disputed provision in that plan aimed to make it easier for low-income and moderate-income families to buy homes acquired by the bailout agency.