Last January, when the Washington Nationals signed right-hander Esteban Loaiza to a one-year, $2.9 million contract, the idea was that it could benefit both parties. Loaiza, run out of New York after a failed stint with the Yankees, would be able to regain his reputation, and the Nationals, in a constant state of flux after moving from Montreal, would get a cheap, reliable pitcher.

Yesterday, Loaiza cashed in on his rebuilding year, signing a three-year deal with the Oakland Athletics that baseball sources said was worth $21.375 million. And the Nationals are left where they were a year ago -- having to pursue pitching elsewhere on a tight budget limited by the fact that Major League Baseball still owns the team.

"We were not prepared to go to those kind of dollars," Nationals General Manager Jim Bowden said. "We wish him luck, and we wish we could have kept him, but we couldn't pay that kind of money."

The deal, which follows the five-year, $47 million contract granted to former Baltimore closer B.J. Ryan by the Toronto Blue Jays, is an indication that pitchers will again be handsomely rewarded this offseason. And Washington simply was unable to compete for Loaiza's services. MLB is still haggling with the D.C. Council over a lease for a new stadium for the Nationals, and is delaying the choice of a new owner until the lease is in place.

That, in turn, hampers the Nationals' entire operation. Bowden is still unsure of his budget for next season -- and is even unsure who will set it, MLB or the new owner. With baseball's winter meetings set to begin next week in Dallas, the Nationals are preparing for transactions they don't know they'll be able to pull off.

"I've got a lot of compassion for Jim," said Loaiza's agent, John Boggs. "He's dealing with an unfair situation. He's got his hands tied when 29 other teams don't."

Loaiza went 12-10 with a 3.77 ERA in 217 innings for Washington, a solid if unspectacular year that put his career back on track after a half-season with the Yankees in which he lost his starting job and posted an 8.50 ERA. In 2003, he was the runner-up for the American League's Cy Young Award when he went 21-9 for the Chicago White Sox.

The Nationals will receive a first-round pick in the 2006 draft as compensation for losing Loaiza. They initially offered him a two-year deal worth just more than $8 million, and a club source indicated the team might have been willing to go as high as $5.5 million per season. But Boggs said the Nationals never offered more than two years, "and we knew, with the kind of pitcher Esteban is and the way the market is, it would take more than that."

Loaiza's loss, for now, leaves the team with a gaping hole in its already thin rotation. Livan Hernandez and John Patterson are the only starters guaranteed to return from the 2005 team. Brian Lawrence, acquired earlier this month in a trade with San Diego, will likely fit in the fourth or fifth slot. Ryan Drese is a less-than-palatable candidate even if he returns healthy from season-ending shoulder surgery. So Bowden's objectives at the winter meetings are plain.

"We are interested in whatever pitching is out there -- free agents, trades, whatever," he said.

Bowden wouldn't comment on any potential targets. A club source, however, said that trade talks with Arizona about right-hander Javier Vazquez are "very much alive." Vazquez, who spent the first six years of his career with the Nationals franchise when it was the Montreal Expos, has requested a trade from the Diamondbacks in hopes of getting closer to his home in Puerto Rico. He went 11-15 with a 4.42 ERA in 2005, and his reputation is for having a superior arsenal but not always delivering results.

Vazquez has two years and $24 million remaining to be paid on a four-year, $45 million deal, but because of the trade demand, the Diamondbacks are willing to eat a significant portion of the remaining money, the source said. Because Vazquez is a veteran who was traded -- from the Yankees to Arizona -- in the middle of a multiyear contract, he has the right to request a trade, and he will become a free agent on March 15 should the Diamondbacks not comply.

The Nationals have also met with the perceived stud of the free agent class, former Florida right-hander A.J. Burnett, and they remain in the running, in part because Burnett's wife is from Maryland. But they still haven't extended an offer, though a club source said that could change at the winter meetings. Burnett has reportedly been offered a five-year, $50 million deal by Toronto, and it's unlikely the Nationals could reach that range without a new owner.

Washington is still speaking with the agents for reliever Hector Carrasco, who filled in as a spot starter at the end of the season. One strategy would be for the Nationals to take the money they would have spent on Carrasco and Loaiza and make an all-out effort to sign Burnett.

Bowden, meanwhile, awaits his fate with the Boston Red Sox, with whom he has interviewed for their GM position twice in the last three weeks. Nationals President Tony Tavares said yesterday that a decision on the future of Manager Frank Robinson likely won't be made until Bowden's situation is resolved, which should be by the end of this week.

"Even though he's not signed, Frank's still our manager," Bowden said. "All of our top brass here is unsigned, but we're still operating. But he's still the manager, and at some point, when we get the go-ahead and can proceed, we'll resolve the situation in the next couple of weeks."

Esteban Loaiza's three-year deal with the A's is more indicative of his 2003 season, when he was 21-9 and the runner-up for the AL's Cy Young Award with the White Sox.Esteban Loaiza was 12-10 with a 3.77 ERA in 217 innings this season for the Nationals. "We were not prepared to go to those kind of dollars," Nationals General Manager Jim Bowden said.