NOT VOLUNTARILY, President Bush is going to make banking reform his most urgent domestic legislation this year. It's not voluntary because the bank deposit insurance fund is headed toward insolvency and, by one careful estimate, is likely to arrive there by the beginning of next year -- an election year. The banks got only a few lines in Mr. Bush's State of the Union address, but they will get more attention in speeches and statements yet to come.

The administration's banking bill, which is scheduled to emerge some time in the next week or so, will immediately be swept up in violent controversy. But some version of it will be forced to passage by the menace of that impending insolvency. The S&L disaster has amply demonstrated why an insolvent deposit insurance fund is intolerably dangerous. If there is no money in the fund to pay off depositors, the federal regulators will not be able to shut down failing banks -- and their losses will continue to multiply. As the S&Ls have shown, those losses can go unimaginably high.

The key question is a simple one: Who bails out the insurance fund? Robert Reischauer, director of the Congressional Budget Office, warned the Senate Finance Committee this week that its losses over the next two years -- assuming that the recession is a mild one -- may be around $13 billion. Who comes up with that $13 billion?

One possibility is to raise still higher the insurance premiums that the banks pay for deposit insurance or to impose other assessments on them. Making the banks pay for their own rescue might satisfy a certain rough sense of justice, but those premiums and assessments would have to go very high -- high enough to interfere with banks' ability to lend. But to recover quickly from the recession, the economy needs a banking system that continues to lend on normal terms. There's already some anxiety at the White House that the banks are holding back. "Sound banks should be making more sound loans now," Mr. Bush exhorted them in his address.

That makes it extremely risky to try to force the banks themselves to rescue the insurance fund. The other possibility -- and as a practical matter, there is only one other -- is to allow the insurance fund to borrow from the U.S. Treasury with the money to be paid back (maybe) in better times. That idea is greeted with rage by people who see, not incorrectly, another raid on the taxpayer. But the taxpayer has a much greater interest in a rapid economic recovery than in punishing banks.

There will be much, much more in the banking bill than the rescue of the insurance fund. It apparently envisions a sweeping reform and renovation of the whole financial system. But the insurance fund and its troubles present the issue that's going to have to be resolved first.