Sen. Breaux Sees Support Lagging Among Senators For Use of IDBs
WASHINGTON - Sen. John Breaux, one of the champions in Congress of small-issue industrial development bonds, said yesterday he does not believe there is enough support among senators at this point to ensure an extension of the IDB exemption beyond its Dec. 31, 1991, termination date.
The Louisiana Democrat also said he believes Congress will pass a tax bill sometime in the next two years that could serve as a vehicle for expiring provisions, but that legislation may not come this year. Failure to approve a tax bill by the end of the year would mean the tax exemptions for IDBs and for mortgage revenue bonds would lapse on on Dec. 31.
Sen. Breaux, a member of the Senate Finance Committee, made his comments during a speech to the Council of Industrial Development Bond Issuers' annual conference here.
Since he introduced legislation in June to extend the IDB exemption, only five senators have signed on in support, Sen. Breaux said.
"We're going to have to have more of a show of support if we're going to be able to continue [small-issue IDBs] as far as the Senate is concerned," he said.
Visible support for IDBs will be crucial when lawmakers consider whether to extend that tax break, because it will compete with nearly a dozen other expiring tax provisions for the legislators' attention, Sen. Breaux said.
In addition, Congress is now operating under a requirement that any proposals that lose money for the federal government, such as extensions of expiring provisions, must be offset by revenue-raising proposals, Sen. Breaux said. Only the most popular tax breaks will be able to win support for their companion revenue-raising proposals, he noted.
Sen. Breaux said he believes Finance Committee Chairman Lloyd Bentsen, D-Tex., "generally supports the concept" of small-issue IDBs. "I don't think he is opposed to it in any sense, but I do think we have to get him to understand there is a constituency for them."
Without such a show of support, "Lloyd Bentsen is going to say, ~Look, there's no interest in this,'" when it comes time for the panel to decide which expiring provisions to continue, Sen. Breaux said.
Congress saved the mortgage bond and IDB exemptions from extinction in 1989, and again in 1990. But both times those and other expiring provisions were attached to a comprehensive tax bill designed to help reduce the federal deficit. Since Congress passed a multiyear deficit bill last year, there is no need for one this year, and some mortgage bond and IDB supporters are worried there will be no tax vehicle this year to which they can attach those extensions.
Those supporters have said they hope legislation sponsored by Rep. Dan Rostenkowski, D-Ill., to simplify the tax code could serve as that vehicle. Rep. Rostenkowski, however, has not said when he plans to bring that bill to a vote in the House Ways and Means Committee, which he chairs.
Rep. Rostenkowski, in fact, passed up an opportunity to lay out his plan for taxes and tax-exempt bond proposals when he delivered a speech to the Public Securities Association's first annual awards dinner Monday. When asked whether his failure to discuss those plans meant he had nothing to say about them, an aide to the congressman said, "That's largely it."
There is another problem for the group of 12 expiring provisions looming on the horizon next year, Sen. Breaux said. In 1992, several more will be added to the list, increasing the amount of money Congress will have to spend to extend the entire group, he said.