WASHINGTON -- Sometimes you have to take what you can get or face getting nothing at all.

Unfortunately, that is the situation facing the tax-exempt bond market when it comes to the continued use of mortgage revenue bonds and small-issue industrial development bonds. With virtually no chance that Congress will enact a major tax measure this year, the oultook for extending the Dec. 31 termination date for the tax exemption for mortgage bonds and IDBs, as well as the low-income housing credit, now appears as dim as the light reflected from the planet Pluto.

If Congress adjourns just before Tanksgiving, as appears likely, lobbyists and congressional aides say there is almost no chance the use of the two popular bond programs will be extended for another year. However, they do admit there is a slight chance that the use of mortgage bonds, IDBs, and the other expiring provisions could be extended if Congress stays in session until just before Christmas.

But even that wouldn't be easy. Extending the package of expiring provisions through next year would cost about $2 billion, and it may be impossible for Congress and the administration to agree this year on how to raise enough revenue to pay for the extensions.

If Congress stays in session until Christman, some House tax staffers say two possible ways to prevent mortgage bonds and IDBs from lapsing would be to push for a three-month or six-month extension of all the provisions. Such an extension, particularly a three-month one, would not be very expensive and would keep both exemptions alive until next spring, when Congress should be well on its way toward putting together a major tax measure, particularly since Democrats will be pushing to get a measure completed well before the fall elections.

Under the scenario, the use of mortgage bonds and IDBs might lapse for a few weeks, as they did in the fall of 1990, or up to six months, as they did in early 1984. But such a lapse would keep the programs alive and do far less damage than having them expire on Dec. 31 with little chance of renewal for up to 10 months.

While the outlook is glum, issuers and underwriters still have two-and-a-half weeks before the Thanksgiving adjournment target to press forward with an intensive lobbying campaign. And market participants have substantial support. Nearly 90% of the members of both the House and Senate have co-sponsored the extension of mortgage bonds, and nearly half of the House and 14 members of the Senate are bacing a renewed use of IDBs.

Market participants must use the few days remaining to put a full court press on congressional leaders to keep the programs alive. Even a three-month reprieve is better than nothing.

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