WASHINGTON -- Anyone who thinks there will be a second tax bill this year had better think again ... especially after last week.
For the last couple of months, many in the municipal market have been harboring the dream that a second measure, one containing numerous proposals to case the curbs on tax-exempt bonds, could be enacted this fall.
The dream started in May when House Ways and Means Chairman Dan Rostenkowski said it would not be possible to include proposals to simplify and ease some of the curbs on bonds in the big tax bill now being negotiated by House and Senate conferees.
Instead, the Illinois Democrat said he would try to include those items later this year by drafting a second bill a measure that lobbyists believe might include President Clinton's upcoming health" reform measure.
The Ways and Means panel kept the dream alive by holding hearing in June and again this month on numerous tax incentives, including nearly two dozen that would ease the curbs on municipal bonds.
All but the most naive knew from the beginning that the odds of getting a second bill this year, even if it contains health-care reform, are not good because Congress may not even be able to agree to the current package of tax increases.
Getting Congress especially the Senate, to agree on a second set of tax and revenue increase to offset the cost of any bond incentives and health-care proposals is seen as almost impossible, especially when gangs of Republicans and conservative Democrats are constantly roaming the halls of Congress waiting to pounce on any tax hike proposals.
But the death knell for any second tax measure this year sounded last week when the former of the House pleaded guilty to helping several congressman embezzle money from the House Post Office. While those congressmen were not identified, evidence contained in court papers indicates that Rostenkowski is one of those who allegedly received thousands of dollars in the scheme.
If Rostenkowski is indicted as now seems likely, he will have to step down, and it will be very difficult for his replacement to shepherd a second bill through the House this year.
Rep. Sam D. Gibbons, D-Fla., the second in command at Ways and Means who would automatically become acting chairman pending selection of a permanent chairman, says he is ready to take over for Rostenkowski.
But lobbyists doubt that Gibbons has the political savvy and bargaining talent to get a second bill especially with a health-care package, through Congress this year.
Without Rosty's ability to ramrod legislation through an increasingly hostile House, a second tax bill and any bond provisions will remain a dream for this year and, perhaps, for some time to come.
