WASHINGTON -- Leslie Samuels didn't say it in so many words, but his message to Congress last week was clear enough: the Clinton administration doesn't want a second tax bill this year.
Samuels, assistant Treasury secretary for tax policy, was making his second appearance in less than three months before the House Ways and Means subcommittee on select revenue measures to testify on panel member's favorite tax proposals.
Samuels estimated that so far this year he has offered an opinion on at least 250 suggested tax amendments. This is itself is probably a reason to think twice about putting a bill together, as Samuel's diplomatically pointed out.
"Although many of those proposals could be meritorious, collectively they could result in further instability in our tax laws," Samuels testified.
Samuels' main theme, in fact, was stability: He reminded the committee that only a few weeks had passed since President Bill Clinton signed into law the huge budget and tax package. He suggested it may be time to stand back and give the taxpayers, their lawyers, and their accountants time to get used to the changes.
"We would urge the committee in its deliberations on the miscellaneous revenue proposals to consider the importance of stability in the tax law," Samuels said.
"An argument can be made that additional changes to the Internal Revenue Code should be minimized for a period of time sufficient to allow taxpayers and their advisers to absorb the significant changes that have just been made."
If Congress does decide to go ahead with a second tax bill, Samuels said that at the very least lawmakers should make no changes that are at odds with the guiding principles of the new budget package. Those principles include deficit reduction, economic growth, equitable treatment of taxpayers, and simplification.
But as Samuels' words indicate, the administration's preference is clearly for no tax bill at all. That's not a surprising position for Samuels to take, given the White House's busy agenda for the next several months.
First, Clinton wants to get the North American Free Trade Agreement through Congress. At the same time, lawmakers will begin debating the President's healthcare overhaul proposal. Those two items will keep the Treasury Department busy enough without its having to worry about any tax packages concocted by lawmakers.
Aside from scheduling concerns, the White House also probably doesn't want to take another beating on tax increases. During this year's budget battle, Republicans seemd to get a lot of public relations mileage out of tagging the Democrats, particularly Clinton, with the tax-and-spend label.
Clinton administration officials know that the type of tax bill the Ways and Means Committee is contemplating would need a hefty revenue-raising component to offset the revenue-losing items proposed by members. That would mean another round of tax increases. Clinton administration officials must know that more tax increases could mean political death for the President, given the beating he took the first time around.
It's also possible that the administration's dim view of a second tax bill is motivated by its concern about the future stability of the Ways and Means panel. Capitol Hill observers are still on the lookout for an indictment of Committee Chairman Dan Rostenkowski, D-Ill., in connection with the House post office scandal.
Expectations of an indictment are still running high around Washington, although Rostenkowski has repeatedly said he did not commit a crime, and the U.S. attorney investigating the matter has given no indication that an indictment is imminent.
Samuels' views, of course, are at odds with that of municipal market participants. They have been hoping all year for tax legislation that eases bond curbs. The restrictions include the arbitrage rebate requirement, limits on bank deductibility, and the $150 million limit on the amount of bonds that a non-hospital 501(c)(3) organization may have outstanding at any one time.
The revelation that the Clinton administration is discouraging a second tax bill is sure to weaken the already dim prospects that the bill will come to pass.
It looks like easing those bond curbs will have to wait at least one more year.
