Blaming weak real estate markets, Treasury Secretary Nicholas F. Brady said yesterday that the agency cleaning up the ailing savings and loan industry could run out of money by the end of this calendar year or early next year.

In addition to requiring more working capital, the Resolution Trust Corp. (RTC) may need another $30 billion to $50 billion in the fiscal year beginning Oct. 1 to cover losses for insolvent thrifts, Brady said. "This is not a discretionary activity," said Brady, a member of the agency's oversight board. "The government's deposit guarantees must be fulfilled."

Brady and the four other members of the RTC board testified at a contentious 3 1/2 hour committee hearing in the continuing attempt by the administration to convince Congress and the public that it is doing its best to come to grips with the worst financial scandal since the Depression.

But questions from committee members indicated that the political impact of the savings and loan crisis is still snowballing. There were sharp questions about not only the cost of the thrift cleanup, but also about the pace of prosecutions of savings and loan officials.

"The Department of Justice's efforts to prosecute thrift fraud are well intentioned but fall way short of the mark," said Rep. Chalmers Wylie (R-Ohio), the senior Republican on the committee. "Apparently, S&L crimes are not a high priority for federal prosecutors."

Brady retorted that both the cleanup effort and criminal prosecutions required more time. "It is not like bank robbery where the guy comes in with a gun, and a camera takes a picture of him. These are very complicated cases." Responding to suggestions that "we are floundering, I just disagree," he said. "It takes a while to get these things going."

Even while Brady was finishing his testimony, Felix G. Rohatyn, a partner in the investment banking firm of Lazard Freres & Co., was telling the National Press Club yesterday that "we should not compound the felony of what happened by dealing with it irresponsibly."

Rohatyn, head of the Municipal Assistance Corp. that helped rescue New York City from its fiscal crisis in the 1970s, said the government should impose a 5 percent income tax surcharge for three to four years to cover the savings and loan losses rather than spread out the cost over 30 years.

"Borrowing the money will turn a $130 billion problem into a $500 billion drain {or much more} over the next 20 to 30 years, leaving it to our children to pay off our own stupidity, as well as keeping a drag on the economy by the continued drain on the capital markets," Rohatyn said.

On the eve of Brady's appearance, the Congressional Budget Office increased to 1,700 its estimate of the number of thrifts that could fail, once again forcing the Treasury secretary to explain his own forecasts.

Brady stuck to the revised estimates he gave three weeks ago for the cost of the thrift bailout, when he conceded that it would climb to $132 billion, instead of the original estimate of $50 billion. His estimate, which excluded interest costs, was based on the seizure of about 1,000 thrifts.

While casting doubt on the new CBO estimate, Brady warned yesterday that his own figures could climb again. "If the real estate market gets worse, the problem will get worse. I'm not going to apologize about it," said Brady as the hearing grew confrontational.

Although the Treasury secretary said S&L spending needs would have to be part of budget talks between congressional leaders and the administration, he did not say how much additional money the administration would seek.

Several Democratic members of the House Banking Committee questioned Brady about the way the Bush administration was handling the cleanup.

Rep. Charles E. Schumer (D-N.Y.) said that "indifference, infighting, delay and confusion" in the cleanup had caused a "second thrift crisis." He said assumptions -- such as that there will be 4 percent interest rates -- underpinning the Bush administration's original cost projections had been "absurd" and complained that "we've heard more from the president about broccoli than we've heard about this crisis."

Rep. Bruce F. Vento (D-Minn.) said the recent flurry of activity by the RTC gave the illusion of progress in the cleanup, while leaving the thrifts' bad assets in the hands of the government.

The hearing also featured testimony by the other members of the RTC's oversight board: Federal Reserve Board Chairman Alan Greenspan and Housing and Urban Development Secretary Jack Kemp, who bristled at some of the Democrats' partisan accusations.

"There is enough blame to go around," Kemp warned as one exchange grew tense. "Let's not let this turn into a political campaign."