WASHINGTON -- Senate Majority Leader George Mitchell kept hope alive for continued use of mortgage revenue bonds and small-issue industrial development bonds yesterday when he pledged to do all he could to extend those and other expiring tax provisions before Congress adjourns for the year.

Though he did not state definitely whether legislation would be passed to extend the tax breaks, the Maine Democrat said, "I will do everything I can to obtain action on those provisions" this year. He made his remarks during a question-and-answer session following a speech he delivered to the Center for National Policy.

Sen. Mitchell's comments come during a week when both President Bush and top congressional Democrats said it is unlikely Congress will act on a major tax package before adjourning this year.

The senator's statements belie the growing pessimism among many Capitol Hill watchers, who have said in recent days that there is not enough time left in the year to extend the expiring provisions and that there is no legislative vehicle on which to attach them, since chances of drafting a major tax cut package appear to have evaporated.

The expiring provisions, which are set to terminate on Dec. 31, "are on a respirator, and the plug is about to be pulled," said one congressional aide. "They are in desperate shape, there's no question about it."

Sen. Mitchell, echoing comments earlier this week by House Speaker Thomas Foley, D-Wash., said he expects Congress to adjourn by Thanksgiving. He did not offer specifics on how tax lawmakers would be able to put together and pass a bill containing extensions of the expiring provisions in the weeks left before adjournment.

But he singled out the tax exemption for mortgage bonds and the low-income housing tax credit, saying both need to be made permanent. Sen. Mitchell criticized the Bush administration for having opposed the two tax breaks in the past and predicted the White House would be a roadblock to their extension this year.

But he said he would fight the administration because the two provisions "are a high priority for me, and a high priority for the Democrats."

The senator did not mention small-issue industrial development bonds by name, though he said many of the other expiring provisons were important to the economy and should be continued.

Sen. Mitchell also did not rule out the possibility that a tax cut package could be enacted this year, though he was short on specifics on how that could be accomplished in the weeks before adjournment.

During his speech, Sen. Mitchell outlined a seven-point plan for economic growth, sounding what are likely to become campaign themes for the Democratic party during next year's election contest. The senator said the federal government must:

* Cut the taxes of middle-income Americans;

* Offer incentives to help first-time buyers purchase homes;

* Find a way to ease the credit crunch and lower interest rates further;

* Enact the comprehensive highway bill;

* Reform the unemployment insurance system;

* Come up with a plan for affordable health care for all Americans;

* Increase investment in education, worker training, research, and development.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.