WASHINGTON - Permanent extensions of two popular bond programs appeared almost certain early yesterday evening as congressional negotiators announced they had reached a final agreement on a $496 billion deficit reduction bill.
Although congressional staff members refused to confirm the exact contents of the final tax component of the package, sources said negotiators held firm through the weekend and yesterday on their agreement late last week to permanently extend the tax exemptions for mortgage revenue bonds and small-issue industrial development bonds.
House Ways and Means Committee Chairman Dan Rostenkowski, D-Ill., said Friday night that, despite cutbacks in other areas of the tax bill, permanent extensions of the tax exemptions for mortgage bonds and small-issue IDBs remained in the measure.
"They're permanent. We did some good" for low-income people and cities making the bond extensions permanent, Rostenkowski said in a brief interview.
Tax committee staff members spent the weekend trying to find areas where items in the bill that lose money for the federal government could be cut back - a hunt made necessary by the conferees' decision to adopt a low fuels tax increase of 4.3 cents per gallon.
But a Ways and Means Committee spokesman said yesterday the effort to scale back provisions during the weekend had not extended to the bond extensions. "I don't think any of the extenders that were permanent have been changed," the spokesman said.
Similarly, housing lobbyists said they had been assured by tax staff members that the conferees were sticking with a permanent extension for the mortgage bond and IDB exemptions, which expired June 30, 1992.
Although congressional aides refused to discuss other bond proposals in the tax package, lobbyists said they understand that both the proposals to remove restrictions on high-speed rail bonds and to create a new category of exempt facility tax-exempt bonds to be used in enterprise zones remain in the measure. But they were unable to confirm the exact details.
As the conferees neared agreement on the overall plan yesterday, one dark cloud on the horizon appeared to be the possibility that the negotiators might have to cut items in the tax bill such as the extenders because they had been unable to get agreement to cut Medicare by $56 billion.
House and Senate conferees had previously settled on a $54 billion reduction level for the elderly health-care program, but a core group of administration and congressional negotiators late Friday substituted a level of cuts $2 billion higher as a way of making up for lower gas tax revenues.
Two key House conferees on Medicare, House Energy and Commerce Committee Chairman John Dingell, D-Mich., and Rep. Henry Waxman, D-Calif., balked at the larger proposed Medicare cuts early in the day.
"I want to assure you that there are no deals cut yet." said Dingell as he walked into a meeting with the negotiators.
That led Larry Stein, chief of staff of the Senate Budget Committee, to say, "If we lose on that one, we'll have to fill in" with cuts elsewhere in the mammoth tax and spending cut bill.
But late in the day, Sen. Jay Rockefeller, D-W.Va., a leading Senate conferee on Medicare, announced that the House conferees had finally agreed to the $56 billion figure.
Rockefeller said the health-care dispute was "the last major issue" to be decided by the conferees, and that a final deal on the overall $496 billion bill was at hand.
"We have a complete agreement. It is done," he said, predicting that "the next step is to pass this thing in the House and Senate" later this week.
Moments later, Rostenkowski also told reporters, "I think we're done." And Senate Finance Committee Chairman Daniel Patrick Moynihan. D-N.Y., said that the tax conferees had agreement on "the whole package" of $300 billion of tax increases and entitlement cuts they were charged with drafting.
Rockefeller and congressional aides said only minor items, including a dispute over some agricultural issues, remained to be resolved. Congressional leaders and aides said they, expected to dispense with those remaining items by last night or this morning.
Also paving the way for the agreement during the day yesterday were signs that the looming troubles for the budget package in the full Senate were dispelling somewhat. Two key Democratic senators who had previously withheld their support for the measure indicated they were leaning toward voting for the final bill.
Sen. Max Baucus, D-Mont., who throughout the negotiations made his support contingent on the 4.3 cent gas tax level, announced on the Senate floor that he would vote for the final plan.
And negotiators appeared to win the support of Sen. Dennis DeConcini, D-Ariz., congressional aides said, by raising the bill's thresholds for higher taxes on Social Security income to $34,000 for individuals and $44,000 for couples.
Negotiators also promised DeConcini that President Clinton would issue an executive order requiring the Treasury to put most of the tax increases raised under the plan into a "deficit reduction trust fund" that would be used to buy down the national debt, the aides said.
House Speaker Thomas Foley, D-Wash., said early in the day that he still expects a vote on the final plan in the House on Thursday, while Senate Majority Leader George Mitchell, D-Maine, said a vote in the Senate would probably come on Friday.