WASHINGTON - President Clinton is personally interested in the idea of expanding the use of tax-exempt bonds to spur infrastructure development, and is open to incorporating more bond proposals into his economic program next year, a top White House official said yesterday.
"He's interested in trying to find ways to increase infrastructure financing through creative techniques," especially since his job stimulus bill with its $8 billion of infrastructure funding was defeated in Congress, Gene Sperling, deputy assistant to the President, said in an interview.
Sperling, one of three members of Clinton's National Economic Council, was instrumental in developing the infrastructure elements of both Clinton's jobs bill and the longterm investment plan included in the $344 billion budget package now winding its way through Congress.
Sperling said that Clinton "wants to know how to leverage, to get the most bang for the buck" since only limited funds will be available for infrastructure programs in the future under Congress' tight budgetary restraints.
"Certainly, people who have ideas in that area have a President who is enormously capable of considering them" because he "gets involved at quite a level of detail" in discussing bonds, Sperling said.
"Clinton has enormous intellectual curiosity" about state and local finance, stemming from his 12 years as governor of Arkansas, Sperling said, adding, "I think he cares about it, too."
During the presidential campaign, Clinton talked "seriously" with Maynard Jackson, the head of the Rebuild America Coalition, about that group's proposals, Sperling said. The coalition has recommended exempting private-activity bonds for infrastructure from state volume caps, increasing bank deductibility for infrastructure bonds, and expanding the use of state revolving funds.
But while the President is "open to reviewing new ideas" being generated by such groups, Sperling said, the coalition's agenda currently is not on the front burner because the administration is preoccupied with getting the budget package and fiscal year 1994 spending bills passed.
Included in the budget package are Clinton's initial tax-exempt bond proposals, including an expanded use of bonds for urban empowerment zones and for highspeed rail projects, as well as permanent extensions of the tax-exemption for mortgage revenue bonds and industrial development bonds.
"Right now we're focused on the appropriations side and getting our current investments through. And that's a hard fight that we're carrying on on several fronts," Sperling said.
"When that's through, unlike the last time around, we'll have several months to think about [other possible bond and infrastructure proposals] instead of just 30 days," he said, referring to the amount of time the administration was given earlier this year to put together its budget and economic plan.
Sperling said the administration has found "problems" with several bond proposals already presented to the Economic Council, but would not specify which ones. The problems center on questions about federal guarantees and revenue estimates, he said.
"We may in the end find the proposals are not viable," Sperling said, without elaborating.
He seemed resigned to the loss of most of the $8 billion of infrastructure funding in the jobs bill, though he noted that the House has approved a remnant of the funding - $290 million for the state wastewater revolving program - in a bill pending in the Senate Appropriations Committee.
"I don't know if there's any other choice" but to accept the loss, Sperling said. "We think it would have been good for the economy to have gotten additional money for the highway program, but we'll just have to move forward with the rest of the President's five-year infrastructure plan."
Another senior White House official, who asked not to be identified, said he believes "the odds are excellent" that Clinton will get his budget package through Congress and that it will survive largely intact, despite an expected close vote in the Senate later this month.
Senate Democratic leaders are negotiating possible changes in the package, but the official said the administration is giving the negotiators wide berth and is concerned mainly about what the bill will look like when it emerges from House-Senate conference.
"We hope we get 85% of what we proposed," including the package's controversial energy tax, the official said.
On the upcoming Senate vote, the official indicated that the administration is prepared to accept the defection of up to five of the Senate's 56 Democrats, several of whom have been outspoken against the plan. "We only need 51 votes," he said.
Another official held out the possibility that the Senate, in its search for more budget cuts, may set its sights on the discretionary spending programs already cut deeply in the fiscal 1994 budget resolution.
The resolution mandated $55 billion of five-year cuts in Clinton's own discretionary proposals, including his infrastructure and other investment initiatives, which the official said will force the administration to fight for those programs in the appropriations process each year.
"Some people are having discussions to see what else they could do on the discretionary side, but I don't see how they could do it. We already have a hard freeze on those programs," the official said.
He added that there are "technical" constraints against cutting the discretionary programs further at this point, because the overall level for those programs already has been set in the budget resolution.