WASHINGTON -- Legislation that would extend the authority to issue tax-exempt mortgage revenue bonds and small-issue industrial development bonds through June 30, 1992, finally cleared Congress early Wednesday when the House overwhelmingly passed the measure.
The 420-to-0 predawn vote sent the bill to the White House for President Bush's signature. Municipal lobbyists said they are all but certain he will sign the bill, and a Treasury official has said the administration does not oppose it.
Until this week, outlook for passage of the extensions had been murky at best. Then on Monday, the House Ways and Means and the Senate Finance committees suddenly passed six-month extensions for the entire group of 12 expiring provisions. The group, which also includes the low-income housing tax credit, is scheduled to expire Dec. 31 under current law.
The House debated the bill Tuesday afternoon, and was poised to approve it by voice vote, but Rep. Bill Archer, R-Tex., demanded a roll-call vote. The House leadership postponed the vote without explaining why, leading lobbyists to speculate that the House was waiting to make sure the Senate would be able to pass the bill.
The Senate did so late in the afternoon, under a special procedure known as a unanimous consent request, under which Senate Majority Leader George J. Mitchell, D-Maine, could declare the bill passed as long as other senators offered no objections.
That procedure almost derailed, however, when Sen. Bob Kasten, R-Wis., requested he be allowed to offer an amendment to repeat a luxury tax on boats. Sen. Mitchell warned Sen. Kasten that any attempt to amend the bill would kill it, and Sen. Kasten backed down.
Proponents of the bond exemptions and the housing credit now are turning their attention to the drive to make them permanent next year. Earlier this week, Ways and Means Committee Chairman Dan Rostenkowski, D-Ill., vowed this year would be the last in which Congress granted a temporary extension.
Mr. Rostenkowski said his committee would begin early in 1992 to examine the merits of each tax break, with an eye toward making some of them permanent. He also said the extensions could be attached to major tax legislation he expected next year.
Some of those lobbyists, however, are worried that talk by the House leadership of trying to pass a major tax bill in December could derail plans for the permanent extensions.
Early on Tuesday, President Bush goaded congressional Democrats into trying to come up with a plan to stimulate the faltering economy, and urged them to quickly pass a stimulus package offered by Rep. Newt Gingrich, R-Ga. That led to a flurry of meetings later that day, and to an announcement that tax lawmakers would begin studying the various tax-cut and tax-fairness proposals that members of Congress have been working over the last several weeks.
House Speaker Thomas S. Foley, D-Wash., told reporters after a late night meeting with House Democrats that Ways and Means will hold hearings next week to consider the plans. On Wednesday, a spokesman for the Ways and Means panel said the hearings are tentatively scheduled for Dec. 5 and 6.
On Tuesday night, Rep. Foley also indicated the House could come back into session in December to craft a tax package and vote on it. By Wednesday morning, however, he appeared to have changed his mind, announcing that the House would adjourn until Jan. 3.
But proponents of some of the expiring provisions said they were still worried Congress could come back into session and try to ram a tax package through before Christmas. That could pose a problem for mortgage bonds and small-issue IDBs, because there may not be enough time in December to make the thorough analysis needed to decide whether to extend those tax breaks permanently, they said.
"My concern is does [coming back in december] alter the plan Rostenkowski announced ... for how he will deal with the extenders on a permanent basis?" said a proponent of one of the expiring provisions.
A housing lobbyist said if Congress did push to complete work on a tax package next month, "more than likely, [permanent extensions] would not be in it." That would be the worst-case scenario for the tax breaks, because "it would leave the extenders high and dry next year," deprived of the legislative vehicle Rep. Rostenkowski had envisioned for them, the housing lobbyist added.
But a municipal lobbyist said he did not expect quick action on a tax package. "The pressure's off for doing something in December," he said. "Now we'll start thinking about our strategy for next year."
