Passage of Tax Bill Is Unlikely in 1991; Rep. Rostenkowski Lays Odds Against It

WASHINGTON -- Rep. Dan Rostenkowski told a group of mayors in a closed-door meeting this week he still sees little chance for passage of a tax bill in 1991, but he did not rule out the possibility that one could be drafted at the last minute, meeting participants said.

More than anything else, the Illinois Democrat who is chairman of the House Ways and Means Committee appears to be waiting for a signal from the White House that it will help develop a tax bill that includes revenue increases necessary to extend about 12 tax provisions set to expire on Dec. 31, said the participants, who asked not to be identified.

In a separate development, an aide to Senate Finance Committee Chairman Lloyd Bentsen, D-Tex., denied a report in The Wall Street Journal on Oct. 2 that said Sen. Bentsen had ruled out the possibility of passing legislation this year to extend the expiring provisions. The provisions include the tax exemptions for mortgage revenue bonds and small-issue industrial development bonds.

According to the aide, Sen. Bentsen had told reporters it would be difficult but not impossible to pass a tax bill. The aid said the senator also told the reporters that if the tax breaks are not extended this year, they would be revived in 1992.

The group of mayors and interested lobbying organizations met with Rep. Rostenkowski to talk about another of the expiring provisions, the low-income housing tax credit.

Rep. Rostenkowski "said he was supportive of the low-income housing credit, but didn't know whether it could be [extended] this year," said a spokesman for the Ways and Means panel. He did not elaborate further on what was discussed at the meeting.

But participants said the talk was extremely pessimistic, with Rep. Rostenkowski laying 9-to-1 odds against a tax bill this year.

The strongest message he delivered at the meeting was that the Bush administration, which has routinely derided Democrats in Congress for trying to raise taxes, will have to sign on to a tax bill if it wants to see its favorite expiring tax provisions extended, the participants said. Business tax credits for research and development are reportedly at the top of its list.

"It's clear to me Rostenkowski is waiting for the administration to come to the table," said an advocate of the low-income housing credit who attended the meeting. "The administration cannot expect the Democrats to pass a tax bill unless it supports [that effort] and helps find revenues."

Along with that problem, Rep. Rostenkowski sees two other obstacles to passing legislation this year, participants said.

One is that any attempts on his part to keep a tax bill narrow will come to nothing when the bill reaches the Senate Finance Committee, which has a history of adding tax breaks that cost the federal government money.

"There has to be restraint in the Senate," said another participant in the meeting. Rep. Rostenkowski "will not tolerate" attempts to make the bill a "Christmas tree" of gifts for constituents, he added.

In addition, before Rep. Rostenkowski begins the tax-writing process, he "would have to feel some intensity from Ways and Means Committee members" to pass legislation, the participant said. He added that the congressman expects to meet informally with members within the next couple of weeks to see if that intensity exists.

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