WASHINGTON -- A group of House tax writers who met earlier this week said they were willing to allow expiring tax provisions to terminate on schedule at the end of the year and renew them in 1992, when Congress is expected to draft a major tax bill, Rep. Brian J. Donnelly said yesterday.

But Mr. Donnelly, a member of the House Ways and Means Committee and a key supporter of tax-exempt mortgage revenue bonds, said he expects Ways and Means Democrats to meet again next week to discuss further what to do about the group of expiring provisions, which includes mortgage bonds, small-issue industrial development bonds, and the low-income housing tax credit.

Meanwhile, committee Chairman Dan Rostenkowski, D-Ill., yesterday day became the latest member of Congress to unveil a proposal to cut taxes. His plan, which House leaders said has the support of most Democrats, could enhance demand for tax-exempt bonds because one part of the proposal would increase taxes on the rich. But some of that increased demand could be counteracted by another part of the plan, which would raise the altivernative minimum tax rate on individuals to 25% from 24%.

In an interview, Rep. Donnelly described a closed-door meeting of "about eight or nine" Ways and Means Democrats earlier this week, who said they were willing to defer action until next year on the expiring provisions.

But because the group represented such a small segment of the 23-member Democratic contingent on the committee, Rep. Donnelly said he expects another meeting next week to iron out the issue, when more members can be present.

Rep. Donnell said the committee needs to thoroughly discuss what the effect would be on the various provisions if they expire for a few months. Some of the tax breaks could be renewed retroactive to Jan. 1, 1992, without any harm to those programs. But for mortgage bonds and small-issue IDBs, retroactive renewal is meaningless because issuers are prohibited from issuing those bonds during any period that the program lapses.

Rep. Rostenkowski, however, said in a brief interview that he would not be adverse to allowing the expiring provisions to terminate and renewing them next year.

He noted that Senate Finance Committee Chairman Lloyd Bentsen, D-Tex., has suggested that idea. "I don't feel that would be a problem," he added. He also said his members have "mixed feelings" about whether to try passing legislation to continue the expiring provisions or wait until 1992.

Rep. Donnelly said there was still some hope for the expiring provisions, though the outlook is bleak.

"It's not over yet. There's still life in the body," he said. "Not much, but it's there."

Rep. Donnelly predicted that if Congress extends the tax breaks, "it will happen to day before we adjourn" for the year. Congress hopes to finish its work before Thanksgiving.

He also said that next year tax writers are likely to take a hard look at the tax provisions and decide which ones should be made permanent and which should be allowed to die.

"Next year it will be survival of the fittest," Rep. Donnelly said.

Rep. Rostenkowski's plan would allow middle- and low-income taxpayers to claim a credit of between $200 and $400 on their income taxes in 1992 and 1993 for a portion of the social security and Medicare taxes withheld from their paychecks.

Because that plan would mean the federal government loses money, Rep. Rostenkowski proposed three permanent tax increases on the wealthy to raise revenue, one of which is the increase in the minimum tax to 25%. A second would add a top marginal tax rate of 35% for high-income individuals. Under current law, the top rate is 28%.

Thirdly, Rep. Rostenkowski would impose a 10% surtax on individuals who earn $1 million a year. That surtax would apply only to the portion of the taxpayers' income that exceeded that level.

Rep. Rostenkowski continued to insist that he does not want to push for a tax-cut bill this year, but said his committee may hold hearings on his proposal in December.

House Speaker Thomas Foley, D-Wash., told reporters Rep. Rostenkowski's plan "has my support and the strong support of the Democratic caucus," and also has "a very high degree of probability of being passed by the House."

Rep. Foley, however, said he doubted there was enough time to enace a tax-cut bill this year because President Bush has not unveiled any plans of his own to lower taxes of middle-income Americans.

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