M PTA7C Hi apcf Associated Press
X ^1 w W kj ML^ A £n ^ Edited by Jana Pedersen
NelSraskan
Editor Eric Planner Graphics Editor John Bruce
472-1766 Photo Chief Al Schaben
Managing Editor Victoria Ayotte Night News Editors Matt Herek
Assoc. News Editors Darcie Wlegert Chuck Green
Diane Brayton Art Director Brian Shelllto
Editorial Page Editor Lisa Donovan Professional Adviser Don Walton
Wire Editor Jana Pedersen 473-7301
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Congress’ S&L bailout delay
could cost taxpayers millions
WASHINGTON - Congress’ re
fusal to provide more money for sav
ings and loan bailouts will delay the
closing of failed institutions for months
and add millions, or even billions, of
dollars to taxpayers’ costs, analysts
said Monday.
Legislators’election-year squcc/.c
left the Resolution Trust Corp., the
bailout agency created last year, with
out the funds needed to close more
than 300 insolvent or near-insolvent
thrift associations.
That means the institutions will
continue to run losses, funding them
selves with high-intcrcsl deposits. That
in turn weakens healthy competitors
by forcing them to raise their deposit
rates, raising the specter of additional
failures.
“It’s going to cost us additional
money. We’re going to have to slow
up the resolution of failed thrifts,” L.
William Scidman, chairman of the
trust corporation, said in a telephone
interview.
He estimated the cost of a three
month delay at $250 million to $300
million. The Congressional Budget
Office pul it at $300 million to $400
million, while Bert Ely, a private
analyst in Alexandria, Va., estimated
it at $2 billion to S2.5 billion.
The added costs, although spread
over the life of the bailout program,
will make it even harder for the gov
ernment to meet the $500 billion
deficit-reduction goal in the five-year
program adopted over the weekend.
The trust corporation, which had
handled 287 failed thrifts through the
end of September, has enough money
left to pay acquirers to lake over an
additional 65 to 75 small institutions
by the end of this year, according to
spokesman Steven Katsanos.
But that would still leave it with
more than 100 S&Ls to handle on top
of several hundred others judged to
be near failure.
Also, financing disruptions tend to
discourage potential bidders and make
it more difficult for the agency to hire
tnc ouisiac experts it needs, nc said.
The agency has already been forced
to delay seeking acquirers for 18 large
institutions until its funding is secure.
Katsanos said.
Congress’ Sunday morning revolt
against further spending left Bush
administration officials and Demo
crats blaming each other for the ex
pected consequences.
Rep. Henry B. Gonzalez, D-Texas.,
chairman of the House Banking
Committee, said Treasury Secretary
Nicholas F. Brady’s refusal to testify
in support of the administration’s
request “created an unfortunate at
mosphere” for approval of more
money.
However, Desiree Tucker-Sorini,
deputy assistant secretary of the Treas
ury, said, “The need for action and
the consequences for failing to act
were spelled out in great detail over a
period of months by the (Treasury )
secretary and others.”
Soviet Georgia’s non-Communists win
TBILISI, U.S.S.R. - Non-Commu
nist parties won elections in Georgia
on a platform calling for independ
ence from the Soviet Union, private
ownership of land and a capitalist
economy, officials said Monday.
“We arc certainly going to have a
majority in parliament,” said Zviad
Gamsakhurdia, leader of the victori
ous Round Table-Free Georgia bloc
of political parties.
With about 90 percent of the re
gions reporting, Gamsakhurdia
claimed victory in about 70 percent.
He protested what he called gross
violations” of the election law and
said Communist authorities “terror
ized the non-Georgian population”
along the borders of the mountainous
southern republic, which is dotted
with pockets of Azerbaijani and other
ethnic groups.
A member of the central election
commission, Alexander Kobalia, said
that preliminary results showed a
slightly less sweeping victory for
Gamsakhurdia’s Round Table, with
the bloc winning about 60 percent of
the vote versus JU percent lor the
Communist Party.
The final results will be ready on
Wednesday, and a runoff will be held
for close races on Nov. 11, he said
No date has been set yet for con
vening the Georgian Supreme Soviet
legislature, which is expected to de
clare independence from the Soviet
Union.
Among the 15 Soviet republics,all
but Kirgizia have declared some form
of sovereignty or independence.
I Bill will help pay medical costs
WASHINGTON - Thousands of additional
poor children and elderly people will get fed
eral help paying doctors’ bills under one of
several social programs being expanded along
side the spending cuts in the deficit-reduction
bill.
Advocates for the poor lauded the initiatives
Monday, saying they will direct needed federal
money to low-income families not receiving
welfare.
“That’s the new theme here,” said Robert
Grcenstcin, executive director of the Center for
Budget and Policy Priorities, a Washington
based advocacy group. “There’s an increased
recognition by the Congress of the problems
faced by the children of families that work but
arc still poor.”
The deficit-cutting bill, passed Saturday
just before Congress adjourned for the year,
contains $500 billion worth of tax increases
and spending cuts over the next five years. But
it also carries with it billions of dollars for new
spending, mainly under Medicaid, Medicare
and Social Security.
One of the most far-reaching provisions
would expand Medicaid — which helps the
poor pay medical bills — to cover all children
below age 19 whose families arc below the
poverty level.
Currently, poor children younger than age 6
are covered. Most of those covered above that
age belong to families on welfare, leaving out
those in families who earn just enough not to
qualify for welfare.
The change would be phased in gradually,
initially adding only 7-year-olds to the pro
gram and progressing to children one year
older each year.
The eventual effect is expected to be
enormous. Officials believe 704,000additional
children will receive Medicaid benefits by 1995,
costing the government $560 million during
the next five years.
The government will spend $580 million
over the next five years to help senior citizens
receive care in their homes, adult day-care
centers, or in group homes.
It will also put up S387 million io pay the
monthly Medicare premium for doctors’ ex
penses — an out-of-pocket cost for most
Medicare recipients — for many of the poorest
elderly.
In a separate SI00 million effort, the gov
ernment will provide at-home care for retarded
people.
Overall, the deficit-reduction bill envisions
additional Medicaid spending of S2.3 billion
through 1995.
Private lawyers serve as prosecutors
SEATTLE - King County Superior Court is
no longer hooked on drug eases, thanks partly
to private lawyers who served as prosecutors
without cost to the taxpayers.
About a dozen ex-prosecutors and 30 rela
tively new lawyers helped dear a backlog of
512 felony eases, most involving possession of
illegal drugs or intern to sell, court officials
said.
“It was a signal success, no question about
it,” Prosecuting Attorney Norm Malcng said.
“We’re going to continue to have the private
bar involved on a pro bono basis.”
Precise statistics have not been compiled,
but Malcng said the conviction rate appeared to
be just slightly less than the 80 percent for eases
handled by staff prosecutors.
Pro bono work, in which private lawyers arc
paid by their firms or simply agree to handle
cases without a lee, has long been common in
criminal law.
Only recently, however, has the practice
emerged as a potential panacea to the volume
of drug cases that plague prosecutors nation
wide, said Richard L. Wintory, director of the
National Drug Prosecution Center for the Na
tional District Attorneys’ Association in Alex
andria, Va.
San Diego has a well-established pro bono
prosecutor program, and for nearly two years
the Delaware state attorney general’s office
has had a “Icnd-a-prosccutor” agreement with
a New York law firm. Across Washington
state, a similar effort has been mounted in
Spokane. The Delaware program is being chal
lenged in the appeal of a drunken-driving con
viction in Court of Common Pleas in Wilming
ton.
Wintory said publicity on Seattle’s crash
program this summer drew so much interest
that he has begun a survey of prosecutors in 115
jurisdictions nationwide to identify other help
ful programs.