Senate Panel OKs $45 Billion for RTC : Cleanup: Release of funds may require agency reforms.

WASHINGTON — The Senate Banking Committee on Thursday approved the Clinton Administration’s request for $45 billion to finish the savings and loan cleanup, but freshman Democrats insisted on reforms to protect against waste and fraud at the federal agency handling the cleanup.

“There is absolutely no way I could vote for a blank check for the Resolution Trust Corp.,” said Sen. Barbara Boxer (D-Calif.)

Boxer and two other newly elected Democratic senators, Carol Moseley-Braun of Illinois and Patty Murray of Washington, successfully demanded an amendment requiring the Administration to certify improvements at the RTC as a condition for getting the money.

The vote was 16-3, but the legislative request could face trouble on the Senate floor, where Boxer and others may seek even tougher guarantees in return for the release of funds by Congress.

The White House sought a “clean bill”--meaning money without restrictions on its use to complete the task of disposing assets from more than 700 failed thrifts, and to provide insurance funds to pay for future thrift failures.

The Senate approved an RTC funding request last year by the Bush Administration, but the measure was rejected in the House. This time the White House is hoping that party loyalty will assure the measure’s passage.

The delays have cost taxpayers $1.1 billion, mounting at a rate of $3 million a day because crippled thrifts continue to operate under government supervision because there is no money to close them, according to Sen. Donald Riegle (D-Mich.), the committee chairman.

Riegle and the ranking Republican, Alphonse D’Amato of New York, had supported the clean funding bill, but Boxer, Murray and Moseley-Braun have insisted on their amendment in private negotiations.

If approved by Congress, the $45 billion would bring total spending to $132 billion since the RTC was created in 1989. Another $75 billion was spent for prior thrift failures. Because the government is issuing long-term bonds to pay for the cleanup, the final cost could be $300 billion or more.

Congress has no choice but to vote for the money because the full faith and credit of the United States stand behind the promise to protect deposits up to $100,000. But casting a ballot for the RTC “is a vote from hell,” Moseley-Braun said.

Members of Congress have been hearing complaints from many constituents who want to buy assets--generally loans and real estate--from the RTC but are angry at how the agency sells the items in big, costly blocks to speed their disposal.