WASHINGTON -- The Treasury Department gave mixed reviews to Rep. Dan Rostenkowski's tax-exempt bond simplification bills yesterday and warned that one of his provisions could open the door to arbitrage-driven abuses.

Kenneth W. Gideon, assistant Treasury secretary for tax policy, told Congress he did not object to most of the bond provisions but was concerned about one that would allow an issuer to opt out of the arbitrage rebate requirement a few years after a bond was issued and instead restrict the yield on investments.

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