House approves oversight board for bankrupt D.C.


WASHINGTON -- Moving to drastically restructure home rule in the nation's capital, the House agreed yesterday to create an oversight board with sweeping authority to manage the affairs of the financially distressed District of Columbia.

The five-member board, the most powerful ever created to bail out an American city, will have the authority to control district spending and disapprove labor contracts. A chief financial officer with broad fiscal powers would answer to the board rather than the mayor.

"Life in Washington, D.C., is coming apart at the seams," said Rep. Thomas M. Davis 3rd, the Virginia Republican who was the chief architect of the measure. "This legislation will halt the decay in city services."

The legislation is clearly on a fast track, with President Clinton expected to name the oversight panel by the end of this month.

The House approved the bill on a voice vote, a reflection of the measure's bipartisan support. The Senate is expected to give equally quick approval later this week and send the measure to Mr. Clinton, who supports the bill.

Congressional leaders say fiscal reform is only the first step in an effort to resuscitate a city of 600,000 residents that has seen its tax base shrink while demand for social services has skyrocketed.

Republicans already are talking about business tax cuts and dramatic changes in the district's ailing school system.

The district is facing a $722 million deficit in its current budget of $3.2 billion and could run out of cash by next month, city officials say.

A Government Accounting Office report in February said that Washington was "technically insolvent."

While Mayor Marion S. Barry Jr. has proposed major cuts in spending and hundreds of municipal employee layoffs, Congress decided he wasn't going far enough to balance the city's budget.

"Make no mistake, pain and suffering for the district is unavoidable," said Rep. William F. Clinger Jr., the Pennsylvania Republican who heads the committee that crafted the legislation. "The day of reckoning has arrived."

Del. Eleanor Holmes Norton, the district's nonvoting representative in the House, said the bill was necessary but predicted Congress would eventually have to increase its subsidy to the capital, which this year totaled $660 million.

Under the proposal, the district's residents would continue to elect a mayor and City Council, but the mayor would have to seek approval of Washington's budget from the White House-appointed oversight panel. The bill also gives the district's inspector general new power to investigate fraud and waste in city government.

A handful of House members, led by Mr. Davis, drafted the legislation after a series of hearings that detailed the district's financial meltdown.

J C Stamps, labor committee chairman of the district's police union, said he welcomes an oversight board.

"Anything's better than what we have," Mr. Stamps said. "When you have 'mismanagers' on the City Council and in the mayor's office, it's time for someone to come in and straighten it out."

Later this spring, House Republicans will consider other reforms, such as setting up tax-free "enterprise" zones to attract businesses.

House Speaker Newt Gingrich of Georgia also has suggested changes in the district's school system, such as a voucher plan to give parents money to send their children to private schools.

"They're going to be looking at a lot of different options for improving educational opportunities in the district," said Kevin Kennedy, a spokesman for Rep. Steve Gunderson, the Wisconsin Republican tapped by Mr. Gingrich to examine Washington's schools.

"Everything is on the table," Mr. Kennedy said.

One union leader said district residents are starting to feel like guinea pigs in a Republican experiment.

"I am concerned that there are certain elements in the Congress who are prepared to use our problems as an excuse to turn this city into some kind of a laboratory for their economic, political and social ideology," said Joslyn N. Williams, president of the Metropolitan Council of the AFL-CIO. "What does a free enterprise zone mean? Cheaper wages, that's all."

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