Bush Repeats Call for S&L; Bailout Funds : Thrifts: Brady doubles his estimate of what congressional delays are costing. But analysts say the numbers are inflated.

President Bush renewed his demand Wednesday that Congress approve fresh funding for the savings and loan bailout, which has been stalled for months because regulators lack the money to dispose of failed thrifts.

While the Senate has already approved the needed funding, Administration officials acknowledge that the House is unlikely to follow suit before the election, leaving the Resolution Trust Corp., the S&L; cleanup agency, virtually paralyzed.

Bush, who has made the request before, sent a letter Wednesday to House Speaker Thomas S. Foley (D-Wash.) urging passage of the funding, which was last defeated by the House in March amid allegations of RTC mismanagement.

Although the government plans to continue seizing insolvent thrifts, including as many as 48 more by the end of the year, those S&Ls; will be left in limbo until Congress approves the new money. The government will be unable either to liquidate the institutions or to sell them to private buyers without more money.

Treasury Secretary Nicholas F. Brady warned Congress on Wednesday that the delays are adding $6 million a day to the costs of the S&L; bailout, and threaten to add as much as $1 billion to the bailout’s price tag if the House does not act before the end of the year.

“The problem today is to finish this job, and the only deterrent to progress is Congress’ repeated refusal to vote the necessary funds,” Brady said in testimony before the House Banking, Finance and Urban Affairs Committee.

“The American taxpayer,” Bush said in his letter to Foley, “should not be burdened with the costs of this delay.”

Albert Casey, chairman of the Resolution Trust Corp., the federal S&L; cleanup agency, told the House panel Wednesday that the Administration needs another $43 billion to complete its work, which would bring the total cost of the bailout to $130 billion.

But the issue is now so entangled in election-year politics that further delays seem certain.

Democrats in Congress have repeatedly charged that Bush, fearful of reminding voters of the high costs of the thrift bailout, does not really want to mount the kind of high-pressure lobbying campaign on Capitol Hill that would be necessary to win election-year approval of the controversial S&L; funds.

Democratic leaders in Congress say that it is the opposition of House Republicans--a majority of whom voted against the S&L; funding in March--that has bottled up the legislation. And House Democrats, equally fearful of handing their opponents an easy political issue, do not want to support the bill unless the Republicans join them.

Administration officials deny that President Bush has not pushed hard enough, and have begun to publicly highlight the House’s failure on S&L; funding as a symptom of a larger problem of congressional inaction on the President’s economic policies.

Last week, for example, when the White House released its mid-year federal budget update, Budget Director Richard Darman noted that the Administration’s estimate of the federal deficit for fiscal 1992 has declined by $66 billion, but only because of congressional inaction on S&L; funding. He said the delay will only mean larger deficits in future years.

The Administration’s $6-million-per day figure of the costs of the funding delays was much higher than its earlier estimate of $2.5 million per day, and raised questions among outside analysts about whether the new numbers were inflated.

“You will never be able to find out how that number was arrived at,” said James Barth, a finance professor at Auburn University who specializes in S&L; issues. “But it plays well in the press.”

Still, most analysts agreed that the delays are significantly increasing the ultimate costs of the thrift bailout.

“It is unquestionably increasing the costs,” said Robert Reischauer, director of the Congressional Budget Office. “If nothing is done until the end of year, that really puts off action until at least February,” when the new Congress and President get back to work, he added. “Then you would have had a period of 10 months in which the RTC didn’t have funds to continue operations at an effective pace, and the organization would begin to atrophy.”

Administration officials have repeatedly insisted that the $43 billion they are now seeking would represent the last installment in taxpayer funds needed to complete the S&L; bailout.

Casey said Tuesday that his agency could finish its job of seizing thrifts within one year of obtaining the remaining cash from Congress, and could complete the sale of the real estate and other assets of those S&Ls; another year after that.

The Congressional Budget Office, however, has warned that the costs of the S&L; bailout are likely to rise over the next few years. In a forecast denounced by the Bush Administration, the CBO has said it believes that hundreds more thrifts are likely to fail in the mid-1990s, and that the White House has failed to make adequate preparations to deal with that prospect.

According to a new RTC report on the status of the S&L; bailout issued Wednesday, the RTC now holds $112 billion in assets, most of which are sour loans and other hard to sell properties.

Critics of the RTC management have argued that Casey’s aggressive strategy of selling those assets as fast as possible--as much as $100 billion worth in 1992 alone--will force the RTC to sell properties in large blocks to big buyers, meaning it will not get top dollar for the real estate and other holdings.

Even if the Bush Administration does not obtain the new funding, it will continue to seize more troubled thrifts this year, Timothy Ryan, director of the Office of Thrift Supervision, told the House panel Wednesday. He said as many as 48 severely undercapitalized S&Ls; are likely to be seized. Those S&Ls; will then be left open under conservatorships managed by the RTC, in a kind of state of suspended animation, until more money is appropriated.