WASHINGTON - There's still a chance that the House Ways and Means Committee will draft a second tax bill this year that would include provisions to ease tax law bond curbs, aides to several panel members said Friday.
But those aides cautioned that it will be hard to surmount two big obstacles: The committee may be unwilling to try to raise the taxes needed to pay for the proposals, and it is likely to be preoccupied with major trade and health issues.
The aides said they are still hoping for a second bill because Ways and Means Chairman Dan Rostenkowski, D-111., has shown no sign of backing away from his pledge to try to put such a bill together. He made that pledge in May when the panel was drafting its version of President Bill Clinton's budget and tax package.
At that time, Rostenkowski persuaded panel members not to add their favorite tax proposals to the package, in return for his promise of a second tax bill.
A second bill "is still the chairman's intention," said an aide to a senior Ways and Means member. "That's been the game plan all along."
As evidence that Rostenkowski remains committed to trying to draft a second bill, aides noted that the committee's subcommittee on select revenue measures is holding hearings on members' tax proposals. Those hearings began in June at Rostenkowski's urging, and included a July 13 session that was devoted to tax-exempt bond proposals. The additional hearings are scheduled for tomorrow and Sept. 21.
"I think the chairman intends to move forward" with a drafting session in the near future, said an aide to a Democrat on the committee.
But a spokesman for the committee said he did not know what the plans were for drafting a second tax bill, and he cautioned that Rostenkowski has not-thrown his support behind any individual proposals.
"I don't think there's any commitment to move on any of these," the spokesman said.
If the committee does attempt to draft a bill, the process could grind to a halt if members balk at approving the revenue increases that would be needed to even out the package. The committee has a history of making sure it offsets proposals that lose money for the federal government with revenue raisers.
"At some point I'm convinced they walk away from" a second tax bill because "you've got to raise taxes to pay for it," one congressional tax aide said.
"Obviously, there are serious questions about revenues, and obviously, there are serious questions about scheduling," the aide to the Ways and Means Democrat said. "It's far from clear sailing."
The scheduling conflicts will arise because the committee has two major items on its agenda this fall: ratification of the North American Free Trade Agreement and consideration of Clinton's health care package, which he is scheduled to present to Congress Sept. 22.
"Between Nafta and health care, there is a reasonably full schedule," the Ways and Means spokesman said.
The hearing held by the subcommittee on July 13 covered nearly two dozen bond proposals made by Ways and Means members. They included four so-called rifle shots that would benefit specific bond-financed projects in Kenosha, Wis.; Memphis: Stanford, Calif.; and Connecticut.
Other bond proposals covered in the hearing included:
* Eliminating the $150 million limit on the amount of tax-exempt bonds that a 501(c)(3) organization other than a hospital may have outstanding at any one time.
* Allowing banks to deduct 80% of the cost of carrying tax-exempt bonds if they are bought from issuers that sell no more than $20 million a year. The current limit is $10 million.
* Expanding the so-called 10% private-use test.
* Permitting unused amounts under the private-activity bond volume cap to be transferred to states that use up their cap in a given year.
* Repealing a rule that restricts the use of tax-exempt multifamily housing bonds in conjunction with the low-income housing tax credit.
* Eliminating a requirement that effectively limits the private-use portion of most public power bonds to $15 million.