Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: TUESDAY, April 16, 1991 TAG: 9104160365
SECTION: NATIONAL/INTERNATIONAL PAGE: A-1 EDITION: METRO
SOURCE: Los Angeles Times
DATELINE: WASHINGTON LENGTH: Medium
While continuing to defend the proposal publicly, senior administration officials concede the current plan has the potential to turn into a massive taxpayer bailout of the banking industry, much like the rescue for savings and loans.
Indeed, the mounting criticism that the plan is receiving in Congress is prompting a growing split between the White House and the Treasury over the issue - and a new round of recriminations within the administration.
The White House officials, who asked not to be identified, said they believe the current plan to rescue the deposit fund has little chance for passage in Congress, and think that the administration will have to develop a new proposal.
It was not immediately clear what the administration might be considering as an alternative. The White House is beginning to develop possible substitutes - though the Treasury remains committed to keeping the present proposal intact.
Meanwhile, senior White House officials are seeking to distance themselves from the plan and the potential for blame that could come if the banking crisis worsens.
They now say that Secretary of Treasury Nicholas Brady was warned, before the rescue plan was announced, that it would be viewed as a back-door attempt to push through a government rescue for the banks, but they say that Brady went ahead with the plan anyway.
Treasury officials, however, deny that Brady got any warnings.
The Federal Deposit Insurance Corp. fund protects bank deposits up to $100,000 per account.
by CNB