Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, June 28, 1990 TAG: 9006280677
SECTION: NATIONAL/INTERNATIONAL PAGE: A/9 EDITION: EVENING
SOURCE: Associated Press
DATELINE: WASHINGTON LENGTH: Medium
As the high price tag hits home, Northeastern lawmakers who have already agreed to the bailout are voicing resentment that so much of their constituents' money is flowing to the Sun Belt.
That resentment is threatening to spill over into other spending issues from housing to water projects to farm programs.
The first winds of this regional storm swept over the Senate on Wednesday as legislators from the Northeast and Midwest angrily challenged a move by Sen. Phil Gramm, R-Texas, to shift federal housing grants to the populous Sun Belt states.
Gramm's bid fizzled, but not before senators exchanged heated words for more than two hours on the Senate floor.
"This amendment has the possibility of creating enormous regional animosities, of tearing us apart at a time when we need to be coming together," said Sen. John Kerry, D-Mass.
By turning the S&L issue into a regional fight, the debate was significant in that it cut across party lines. Pundits and politicians have been predicting that the thrift crisis would become a major campaign issue, but the floor debate had members of both parties line up on opposite sides.
Kerry said Gramm's proposal reflected an insatiable appetite for federal tax dollars. The S&L crisis was a disaster with many villains, Kerry said, and the bailout was a necessary solution.
"We're willing to do that. It's been done. We accept it," he said of the bailout. "But apparently it isn't enough."
Kerry spoke ominously of a farm bill about to come to the Senate floor. The bill "with goodies galore" for Western and Southern farm states, may have trouble getting through the Senate, he warned.
If Gramm and others move to tilt other federal programs in favor of the Sunbelt, Kerry said, "the repercussions are going to play out as we debate the farm bill."
Sen. Daniel Patrick Moynihan, D-N.Y., got into the fray by threatening to block a water resources development bill that contains a substantial amount of money for Texas. Moynihan chairs a Senate subcommittee that is handling the bill.
And Sen. Alfonse D'Amato, R-N.Y., challenged Gramm by offering his own amendment to the housing legislation. D'Amato's proposal would have required Texas and other states with high S&L failure rates to give up housing money in proportion to the bailout dollars they were receiving.
D'Amato argued that lax state regulations in Texas led to the S&L slide. New York taxpayers, meanwhile, were being asked to pay for a sizable portion of the bailout.
"The state of New York is on the hook for $17.3 billion to clean up a problem that its citizens did not cause and who will receive no benefit from its solution," D'Amato said.
Gramm shot back that the S&L bailout money wasn't being poured into the coffers of the state of Texas or the bank accounts of its citizens. Rather, he said, it was paying back insured depositors, many of them high-roller investors from the Northeast.
He called the idea of using "trumped-up amendments based on the S&L bailout" a "cute and clever" tactic.
"To in any way equate the S&L bailout with a formula for allocating community development block grant funds, a formula that in its current incarnation is absolutely unfair, is just outrageous," Gramm said. "I'm not trying to beat a regional horse here."
D'Amato admitted that his amendment was more of a symbolic gesture than a serious bill.
by CNB