WASHINGTON President Clinton's infrastructure bond proposals, due to be sent to Congress early next year, will be dead on arrival unless lawmakers change the way they calculate revenue losses to the federal government from the proposals, former Rep. Beryl Anthony said yesterday.
Anthony said in an interview that he was alarmed by the discovery earlier this year that Senate budget rules now require congressional budget estimators to determine the revenue effects of infrastructure and other tax proposals over a 10-year period, up from the previous five years.
"Trying to set economic policy based on 10-year projections I think takes it to the absurd," said Anthony, the former Arkansas Democrat who was known as Congress' chief proponent of tax-exempt bonds until he left Capitol Hill at the end of 1992.
"I promise you when [members of Congress] get into infrastructure. it will hamstring them." said Anthony, who is now the director of the regulatory and legislative division at the law firm of Winston & Strawn.
"All of the mayors and all of the governors will come to Congress next year and say, 'We need more money for infrastructure.' And the Congress will say, 'Fine, we agree with you.' They'll propose a program. they'll go off and have it estimated, and then politically they won't be able to find ways to cut spending or raise taxes to pay for it. And they'll be dead in the water."
In May, Clinton pledged to offer Congress early in 1995 a legislative plan for financing infrastructure improvements; lobbyists predict that the package will contain proposals to ease curbs on tax-exempt bonds. Anthony said he expects the package will be offered as part of the president's fiscal 1996 budget plan, and some details may be unveiled as early as this December.
But the Senate's new revenue estimating rules will be a substantial obstacle to enactment of the package, Anthony said. House rules still require proposals like the infrastructure plan to be calculated only over five years, but because the Senate requires 10, the House will be forced to follow suit. Anthony said there already have been instances this year when. the House cawculated tax proposals on a 10-year basis to be consistent with the Senate.
"I think it's a much more far-reaching amendment that imposes additional handcuffs than people have really stopped to analyze," Anthony said.
The 10-year revenue loss to the federal government of a comprehensive infrastructure package with bond proposals "would be astronomical," Anthony said. "You're talking about roads and bridges. Those are expensive, long-term projects."
One of the dangers with the new, stricter revenue estimating rules is they could cause the president to scale back his plans for a broad, comprehensive infrastructure plan, Anthony said.
White House officials may say to themselves, "'If we go with an expansive program, we know the [revenue estimating] rules are there to beat us, and we're beaten before we get started and it will look like we lost.'" Somebody's got to make the decision to ... articulate a policy that's good for the country and then show the country where the problem is, rather than succumbint to the problem from day one, " Anthony said.
The former congressman said that the only way he sees a broad infrastructure package passing next year is if the budget rules are changed.
'They need to go back in and amend the budget act [and] change it in such a way that acknowledges these problems and sets up a system to allow for exclusions," Anthony said. "The exclusions could be stated in the law, and I think infrastructure would be one of the proper ones."
In addition to his infrastructure proposal, Clinton may soon try to resurrect his idea of proposing an income tax cut for the middle class. Congressional Republicans have said that they plan to unveil a tax cut proposal this fall, and Anthony said the White House is probably studying the idea as well.
But a tax cut proposal would face the same insurmountable hurdle that will block the infrastructure package, he said.
"They'll run into the same problem as with the infrastructure package, and if they try to do both in the same year, then they compound the problem," Anthony said.