WASHINGTON -- Two tax legislators mounted a last-ditch effort yesterday to save the dozen or so tax breaks that are set to expire Dec. 31, including the tax exemptions for mortgage revenue bonds and small-issue industrial development bonds.
Sen. John C. Danforth, R-Mo., and Rep. Frank J. Guarini, D-N.J., introduced legislation that would extend the expiring provisions for one year, but the two legislators did not offer a concrete plan for getting the bill through Congress so close to the end of the legislative session.
They mentioned the possibility of attaching their bill to either of two must-do items on Congress's agenda: A bill to keep unemployment benefits from expiring for people thrown out of work during the recession, and a measure to recapitalize the Bank Insurance Fund.
But Sen. Danforth, who is a member of the Senate Finance Committee, said they also would try to move the measure as as stand-alone bill, despite the concerns raised by finance panel Chairman Lloyd Bentsen, D-Tex., and House Ways and Means Committee Chairman Dan Rostenkowski, D-Ill., that passing a small tax bill would be difficult because of the penchant for tax lawmakers to load such a measure down with costly extraneous amendments.
The one strategy that does not seem possible at this point is attaching the extensions to a major tax cut bill, he said. Congressional leaders, after advocating such a measure, have backed away from the idea in the last couple of weeks.
"There's little chance to get a major tax bill this year, so that's why we're trying to get a minor tax bill," Sen. Danforth said, adding that Sen. Bentsen "is generally committed to the extenders" if they could be done as a bare-bones bill.
Rep. Guarini, a member of the House Ways and Means Committee, said he has raised the issue of the expiring provisions each time Ways and Means Democrats have caucused on tax legislation in recent weeks. He noted Rep. Rostenkowski has not ruled out the possibility of extending the expiring provisions.
"He hasn't said no, and he hasn't said yes. He's very pleasant and he smiles" when the issue is raised, Rep. Guarini said. "I guess it's a matter of, 'read my smile.'"
The two lawmakers appeared at a press briefing along with Sen. Nancy Johnson, R-Conn., another Ways and Means member, and two other senators on the finance panel: Max Baucus, D-Mont., and John H. Chafee, R-R.I. They said several other tax committee members have signed on in support of the bill.
Despite the push by the lawmakers to extend the expiring provisions, many Capitol Hill watchers remained pessimistic that there would be an opportunity to pass such legislation before Congress adjourns for the year, possibly as early as Thanksgiving week.
One lobbyist pointed out that a major sticking point remains on how to pay for the extensions, which Sen. Danforth said would lose $4.7 billion over five years.
"They can't even find the money for unemployment insurance," the lobbyist said, referring to the problems Congress has had completing action on that bill.
But John T. McEvoy, executive director of the National Council of State Housing Agencies, said it was still possible for Congress to act at the last minute to save the tax breaks.
"Congress has two weeks to go, and a lot can happen," Mr. McEvoy said. "Rostenkowski himself has said he would go for a simple extension if it doesn't become a magnet for other amendments," he said, though he added that "the jury's still out" on whether lawmakers will agree to keep extraneous amendments off the bill.
Along with the mortgage bond and IDB exemptions, the group of expiring provisions includes tax credits for low income housing, research and development, employee educational assistance, business investment in solar and geothermal energy, employer-provided legal services, and so-called orphan drugs.