WASHINGTON -- More than 200 House members last week urged Congress's top tax writer to move forward with legislation extending the tax exemption for mortgage revenue bonds and the low-income housing tax credit, which are scheduled to expire Dec. 31.
In a letter to House Ways and Means Committee Chairman Dan Rostenkowski, D-Ill., the biraptisan group of 227 House members said allowing those two tax breaks to expire "would seriously disrupt [those] programs and deny housing opportunities to thousands of needy families."
The group, led by Rep. Nancy Pelosi, D-Calif., said support in Congress "has continued to grow over the life of the programs" and is now "overwhelming." They cited as evidence the record number of congressmen and senators who have signed on in support of bills to extend both the housing credit and the mortgage bond exemption.
The House members had timed the released of their letter to coincide with a closed-door meetin Rep. Rostenkowski held Thursday with Democracts on his panel. Propornents of the mortgage exemption and the housing credit had been anticipating the meeting for weeks and had expected it to provide a blueprint of how the committee might proceed on such issues as extending the group of about 12 expiring tax provisions.
Along with the mortgage bond exemption and the housing credit, that group includes the tax exemption for small-issue industrial development bonds, which is also scheduled to terminated Dec. 31.
But while Rep. Rostenkowski had said after the meeting that he and his Democrats discussed the expiring provisions, they did not come to any conclusion about what to do with them. The main message from the meeting was that Rep. Rostenkowski and his Democrats are not enthusiastic about enacting an economic stimulus bill that tampers with the budget agreement this year.
Lobbyists who have been watching the unfolding of events of the last several days said for the moment extensions of expiring provisions are on the sidelines as the jockeying for position continues among members of Congress and White House officials as to whether and what kind of tax cut bill should be enacted this year.
The lobbyists and congressional aides were split as to whether the growing talk of a tax cut bill helps or hurts the chances for extensions of the bond exemptions and the housing credit. One proponent of the expiring provisions said he was not discouraged by the apparent lack of enthusiasm among Ways and Means members for a tax cut bill to stimulate the economy.
"Nobody said we don't want to do [any kind of] a bill," said a housing lobbyist. "Nobody knows what the package is yet," so they are naturally unwilling to say where they thing they can attach the expiring provisions, he added.
But another lobbyist rated the chances for the expiring provisions as "much worse" after the Ways and Means caucus. He said Rep. Rostenkowski's remarks reflect a deep division between the congressman and House Speaker Thomas Foley, D-Wash., who has said publicly he wants to see a taxcut bill enacted this year. Rep. Rostenkowski "is going to show Foley who writes tax legislation," the lobbyist said.
One congressional aide said he has been pessimistic about the chances for tax legislation for a long time, and "nothing I heard [Thursday] makes me think otherwise." Proponents of mortgage bonds and IDBs "are going to have to fight it out next year to renew" their tax breaks, the aide added.
But another aide said lawmakers will be loathe to leave town without drafting some kind of measure, for fear of being called a do-nothing Congress.
If the discussions over tax-cut bills fall apart and Congress cannot put together a big economic stimulus package before adjourning, "then there will be a realization that this Congress has done nothing."
To avoid seeming ineffectual "there may be desire to do a smaller bill around the extenders," the aide said.
