Just in time for the holidays, here's the first installment in a maybe not-so-fanciful look at how the economic woes might affect North Pole Toys LLC.

WASHINGTON - Santa Claus, Mrs. Claus and elf union leaders genuflected before Congress yesterday and begged for an emergency $18 billion bailout.

Claus painted a bleak picture of his toy manufacturing and delivery company during an unprecedented - and sometimes volatile - three-hour session. "I'm not going to lie to you, folks," Claus said at the start of the hearing. "Our situation is bleak. If we don't get this bailout now, we'll only be able to deliver presents to 15 percent of the world's good children this year. "

Claus' company, North Pole Toys LLC, has been hit with a variety of problems.

With the rise of consumer-friendly Web sites like eBay and Amazon.com, many parents have taken on the task of gathering toys themselves, cutting into Claus' profit margins.

Sales of candy canes have also plummeted in recent years, as many children have been turned off by the direct link dentists found between candy consumption and cavities.

Wages and benefits paid to members of the North Pole Elf Union Local 1225 have also skyrocketed, compared to what lesser-known toy manufacturers pay elves in India and China, said Winkle P. Snowflake, North Pole Toys' financial administrator. "It costs a fortune to maintain the reindeer fleets," Snowflake added. "We tried engineering hybrid reindeers, but that . . . ended in tragedy."

But Snowflake and Claus were unable to detail exactly how much money their company has lost. Claus said it was difficult to pinpoint a specific number because "much of our revenue is measured in joy, cookies and special hugs."

Claus' remarks left some congressional leaders exasperated.

"Frankly, sir, I don't know how we should respond to all of this," said Sen. Chris Dodd, D-Conn. "I mean, until today, none of us thought you were real." Sen. Arlen Specter, R-Pa., wanted to know what Claus and his cohorts had done to improve their situation.

Claus directed a series of expletives at Specter and made a reference to the senator's childhood. He quickly recovered his composure.

'WE'VE AGREED to sell Rudolph to GM. They think he can help their situation," Claus said.

"I've switched to wearing red sweat suits, as opposed my traditional velvet attire. We've offered mini-buyouts to 300 elves. My wife stopped baking cookies. Now we just eat chocolate chip crackers, for God's sake."

Congressional leaders are expected to call on elf union leaders at another hearing tomorrow as the bailout talks continue. *

David Gambacorta is a Daily News reporter.