VIEW FROM WASHINGTON / ROBERT A. ROSENBLATT : Clinton Faces a Challenge in S&L; ‘Vote From Hell’

For nervous members of Congress, the savings and loan clean-up is “the vote from hell.”

The $87 billion already spent on history’s biggest financial bailout didn’t build a foot of highway, deliver a welcome check to a deserving constituent or create a job in a defense plant.

Instead, the money went into a big black hole. It makes up the difference between the value of the shrunken assets of S&Ls--which; suffered from bad loans, inept or corrupt managers and a collapsing real estate market--and the money deposited in their branches by millions of Americans.

Congress eventually must vote for the bailout to fulfill a government pledge to insure deposits up to $100,000, a solemn promise that has prevented the runs on banks so common in the Great Depression of the 1930s, when millions of Americans lost their life savings.

But precious few voters today remember the Depression. So there’s little joy on Capitol Hill in voting for the clean-up funds.

“It’s like voting for a toxic waste dump,” said one legislative veteran.

Since April Fools Day of last year, not a single dollar has been approved by Congress to close the 85 crippled S&Ls; still under government control, dispose of their assets and make up their losses.

George Bush’s S&L; sorrow now belongs to Bill Clinton, whose Treasury Department hopes it has better luck imploring, cajoling, and coercing members of Congress to support funding.

“This time around, the Republicans are playing the exact same games the Democrats played one Congress ago, when Bush tried to get something,” says Susannah Goodman, banking lobbyist for Public Citizen, a consumer advocacy group.

“They’re saying, ‘In your face, Mr. President! This is your problem.’ ”

With no Republican support forthcoming, Democratic leaders in the House wonder if they can hold together the fractious Democratic majority long enough to win passage of a drastically scaled-down funding package. They hope for a vote next week.

The money would go to the Resolution Trust Corp., the often-controversial agency handling the bailout, to shut down the 85 dying thrifts that keep losing a total of $2 million to $3 million a day, a tab that will land in the taxpayers’ laps.

The RTC also has billions of dollars in assets to peddle, from hundreds of long defunct S&Ls; as well as the 85 institutions it is now trying to close. There is $82 billion in assets at the RTC, a dizzying array of good home mortgages, delinquent commercial real estate loans, abandoned shopping centers, half-empty condo developments, empty land, marinas, a couple of church buildings built on speculation--and a chili parlor.

Under George Bush, the RTC policy was sell-sell-sell: move the merchandise in big bulk sales to get it out of the way quickly. This alienated local investors and developers who ran complaining to their members of Congress about being shut out of the deals.

President Clinton came into office in January and proclaimed a new policy: try to sell the RTC assets at retail first, wooing small and medium-size corporate buyers, and make a special effort to get women and minorities involved.

The Administration also pledged management reforms at the RTC, which has been embarrassed by reports of a $100-million computer system that doesn’t work, and a contract to pay 67 cents a page for copying millions of documents.

But the Clinton Administration’s campaign to win funding to finish the bailout has been a stumbling, erratic effort.

First, the Treasury asked for $45 billion, the same figure requested by the Bush Administration. Then, it cut the number to $42 billion, and then to $34 billion, acknowledging that lower interest rates and fatter profits are saving some S&Ls; once expected to fail.

Opponents of the funding were heartened when the General Accounting Office said a scant $12 billion would be needed for the clean-up.

William Seidman, the well-respected former director of the RTC, went a step further, suggesting that no money at all be voted and that the RTC simply depend on asset sales to raise cash.

Cracking the whip of party loyalty, the Administration persuaded the Senate to approve $34 billion, including $18 billion to dispose of the current crippled thrifts and $16 billion for the new insurance fund that will take care of any thrifts which fail after Oct. 1.

However, the effort remains bogged down in the House, where the Banking Committee agreed to $18 billion, saying the other $16 billion would be paid by taxpayers only if the thrift industry proves too weak to finance the new insurance fund.

The outlook for final passage of the bill is far from certain on the House floor.

Congressional reluctance to finish the job is “maddening,” says Bob Schmermund, who watched the futile fight for funding as a thrift industry regulator in the Bush Administration and now observes it at the S&L; trade group, the Savings and Community Bankers Assn.

“Sooner or later, a vote must be held,” insists Schmermund. “It’s maddening for the regulators and maddening for the industry.”

As White House lobbyists twist Democratic arms in the coming days, the arguments will sound much the same as they did under George Bush: Give us the money to finish the job, and trust us to do the right thing at the RTC.

Doubtful members of Congress may shout back: We don’t like the RTC, and we’re not sure we believe your promises!