The Bush administration's top official dealing with the savings and loan crisis predicted yesterday that there will be a "volcanic eruption" when the administration reports to Congress on the cost of a series of thrift deals arranged by the Federal Home Loan Bank Board in 1988.

Deputy Treasury Secretary John Robson acknowledged that the administration is expecting a new round of political criticism over the 1988 deals, in which about 220 failed thrifts were sold to private investors and financial institutions.

The buyers were promised government subsidies estimated now to total $53 billion.

The 1988 deals, however, are currently being reviewed by administration consultants to determine how much they will cost taxpayers and whether the government was too generous with its subsidies to the buyers.

Democrats in Congress led by Sen. Howard M. Metzenbaum (D-Ohio) and Rep. Henry B. Gonzalez (D-Tex.) contend that the deals were too generous.

In the latest congressional hearing on the issue, Metzenbaum yesterday renewed his demand that the government renegotiate the agreements, which constituted the first phase of the $300 billion S&L cleanup.

"What you are seeing now from Howard Metzenbaum is a preview of coming attractions," Robson said in an interview with a group of Washington columnists. "For sure you're going to get a whole 'nother round of volcanic eruptions surrounding the '88 deals when we get kicking around in there."

Treasury officials said the administration has not yet seen results of the reexamination of the 1988 transactions being conducted for the Federal Deposit Insurance Corp., which took responsibility for that part of the thrift cleanup after the Home Loan Bank Board was abolished by Congress last summer.

The transactions were defended yesterday at Metzenbaum's hearings by the two officials in charge of arranging them, M. Danny Wall, then chairman of the Home Loan Bank Board, and Stuart Root, director of the Federal Savings and Loan Insurance Corp.

Wall and Root testified that the 1988 thrift rescues saved taxpayers billions by putting out of business some 223 thrifts that long had been insolvent but were continuing to operate because the federal insurance fund for thrifts had gone broke, leaving no money to pay off their depositors.

Lacking cash, the bank board under Wall came up with what was called the Southwest Plan, to persuade private investors to take over failed thrifts in return for various government subsidies lasting for 10 years.

The subsidies included billions of dollars of notes on which the government must make interest payments, the costs of managing repossessed real estate and billions in tax breaks.

At the time, the transactions were estimated to cost the government $40 billion, not including the tax breaks. Now that estimate has been raised to $53 billion and it is expected to go higher.

In an interview outside the hearing room yesterday, Wall said he agrees that it is possible for the government to save substantial amounts of money by taking another look at the 1988 transactions. By paying off the notes now, it would be possible to save billions in interest costs, Wall said.

Robson warned, however, that if the government renegotiates previous S&L rescues, future investors may be unwilling to buy failed thrifts.

"It could have an influence on the pace" of the cleanup, he said. "I think it is going to slow down the sales process because people are going to get scared" that the government may later reconsider the terms of the transaction.

At yesterday's hearing, Metzenbaum continued his criticism of what he said is "the most outrageous" of the 1988 transactions, the sale to Arizona insurance executive James Fail of 15 failed thrifts that were grouped together into Bluebonnet Savings Bank of Dallas.

A former senior federal thrift official testified yesterday that he would not have recommended the 1988 acquisition of the 15 insolvent Texas savings and loans by Fail if he had known that a company headed by the businessman had been convicted of securities fraud.

George M. Barclay, who is now president of the Federal Home Loan Bank Board of Dallas, said he was unaware that the company controlled by Fail had pleaded guilty to securities fraud in 1976 when he recommended the approval of Fail's acquisition of the thrifts in a deal that involved a large federal subsidy.

According to a document presented by the Metzenbaum subcommittee, however, the Dallas bank board office was made aware of the conviction the day before Barclay advised officials of the FSLIC to approve the sale.

Barclay said he had not seen the document until yesterday and that the information on the conviction of Fail's company would have changed his recommendation.

"Had I known what I know now, I would have objected," he said.

Fail bought the thrifts with $70 million in borrowed money in a deal that was facilitated by a lobbyist, Robert J. Thompson, who earlier served as an aide to then-vice president George Bush.

The hearing was part of a flurry of activity on the costly savings and loan industry collapse as Congress prepared for a month-long August recess during which lawmakers are likely to feel increasing heat from constituents about the rising cost of the cleanup.

Hastily revising its floor schedule, the House yesterday overwhelmingly passed legislation that would help investigators recover the assets of failed thrifts, strengthen criminal penalties for certain banking offenses, establish a 12-member commission to investigate the causes of the thrift industry collapse, boost funding for federal criminal investigations and create a financial fraud unit in the Department of Justice.

Over the objections of Gonzalez, House Banking Committee chairman, who called the legislation "a bastard bill with all the defects {resulting} from such a birth," the House passed the measure 424-4.

Gonzalez and his tiny band of opponents ridiculed the measure as an example of political posturing, saying that Congress was panicking in the face of voter anger over the thrift crisis.

As the House passed its S&L crime measure, Metzenbaum stepped up his criticism of the Bluebonnet deal and what he characterized as high-level influence peddling by Thompson.

The arrangement, said Metzenbaum, earned Thompson more than $1 million from Fail and a 2 percent share of the thrift deal that could eventually earn him "tens of millions of dollars."

Thompson's lawyer, Stanley M. Brand, called Metzenbaum's estimate of Thompson's fees "a fictional figure."

Metzenbaum also charged thatThompson had gotten an advance look at an inspector general's report on the Bluebonnet deal and suggested possible changes to the draft report that concluded that Fail should not have been accepted as a qualified acquirer of the thrifts.

But Metzenbaum said it is not known whether any changes suggested by Thompson were included in the final report because it has not been made public.

Thompson yesterday refused to answer a subpoena from the subcommittee demanding he testify, and Metzenbaum said he will try to compel him to appear.

Brand, in a letter to Metzenbaum, accused the subcommittee of conducting its investigation in an "irregular and abusive manner" that he said amounted to a "fishing expedition."

Brand challenged the subcommittee's jurisdiction to hold the hearings and said that his client's rights to due process had been abused by the leaking of documents to the news media.

Staff writers Bill McAllister and Hobart Rowen contributed to this story.