An Error Keeps S&L; Bailout Agency Going : Thrifts: A mistake allows the Resolution Trust Corp. to borrow $18.8 billion, but without more money a shutdown still looms next year.

WASHINGTON —  Bush Administration officials decided Thursday to stave off a shutdown of the savings and loan bailout by taking advantage of a drafting error in last year’s law.

The mistake will let the Resolution Trust Corp. borrow up to $18.8 billion more than Congress apparently intended.

The short-term borrowing, to be repaid through the sale of loans, real estate and other assets once owned by failed S&Ls;, frees the agency to continue some cleanup activities into early next year.

The agency can now pay acquirers to take over 18 large, insolvent thrifts whose rescue had been indefinitely postponed.

David C. Cooke, executive director of the agency, complained in a memo that congressional inaction still would cause a two-month delay of those 18 deals, originally scheduled for completion before Dec. 31. Also, the agency will have to delay rescues it planned for the January-March period.

The delays in shutting down money-losing thrifts will cost taxpayers $250 million to $300 million, he said. If the Administration had decided against taking advantage of the error in last year’s law, further delays would have cost taxpayers an additional $350 million to $400 million, Cooke said.

The trust corporation’s oversight board, which is chaired by Treasury Secretary Nicholas F. Brady, reached its decision in a private telephone conference call after the House early Sunday morning refused to grant the Administration’s request for more money.

Brady had said the trust corporation needed $40 billion more to cover S&L; losses, on top of the $50 billion authorized by last year’s law.

It also needed additional authority to borrow short-term until S&L; assets are sold, he said.

Rep. Henry B. Gonzalez, (D-Texas), chairman of the House Banking Committee, wrote Brady that he did not believe Congress, which is adjourned until January, would object if the Administration used the error to temporarily borrow $18.8 billion.

But congressional inaction on Brady’s $40 billion request still leaves the Administration facing a halt in the bailout early next year.