Clinton Signs Measure Establishing Board to Oversee D.C. Government

Hoping to avert an embarrassing bankruptcy for the District of Columbia, President Clinton signed a bill to set up an oversight board with broad powers over Mayor Marion Barry and the City Council.

The law also allows the district to borrow hundreds of millions of dollars from the federal Treasury to help pay its bills, and it requires a balanced city budget in three years. The board’s powers include the authority to lay off thousands of city workers.

With Barry looking on, Clinton said the seat of the U.S. government should be transformed into “a city that works.” But leaders of both political parties called the assignment a daunting one.

The city of 600,000 residents faces a $722-million annual deficit and has seemed headed for bankruptcy.

City officials complain that the former federal enclave--which has had “home rule” powers such as an elected mayor and council since 1974--cannot tap the sources of income usually available to municipalities. For instance, the federal government pays no property tax and Congress has blocked city efforts to tax commuters.

Barry, who was reelected to the mayor’s office last November after six months in prison for possession of drugs, had a front-row seat at the Roosevelt Room signing ceremony. Clinton gave him one of the pens he used to sign the legislation and the two chatted amiably.

Outside, Barry said he generally supports the measure, which allows the new board to overrule his budget proposals, even though there are “some restrictions we don’t like.”

Clinton said he would act quickly to appoint the five board members.

He also tapped former Deputy Treasury Secretary Roger Altman, who worked on the New York City bailout under then-President Jimmy Carter, as an adviser on the issue. Altman resigned from the Clinton Administration amid criticism of Treasury’s handling of the Whitewater affair.