Members of House Panel Put ‘Goodies’ in Tax Bill

One of the last items of business for the House Ways and Means Committee as it completed its sweeping tax overhaul legislation was approving transition rules that, in principle, would prevent taxpayers from getting unfairly caught between the old tax code and the new one.

But snuggled among the $40 billion in tax breaks provided by the transition rules were some mysterious goodies that had nothing to do with the shift to a new set of tax laws. The rules, for example, would confer special tax breaks for “certain mass-commuting vehicles,” “a certain domed stadium” and “a specified amount of dock and wharf facility.”

In fact, dozens of the transition rules are prime examples of old-fashioned pork-barrel politics--special benefits that committee members can take home to their districts. In practice and by tradition, they are among the most valuable rewards that the committee chairman can give members in return for their support on crucial, hotly contested issues.

Beneficiaries Not Named

The transition rules do not single out any of their special beneficiaries by name. But the rules are written in enough detail that they could apply to only one or several favored items.

One rule passed Friday, for example, would apply to an urban-development action grant “first approved on Sept. 30, 1983, and further amended and approved by (the Housing and Urban Development Department) on Dec. 31, 1984.” Staff members refused to identify the grant in question.

Another rule gave a tax break to a mutual savings and loan association “holding a federal charter dated March 22, 1985.” The committee maintained the association’s anonymity.

But some of the objects of the transition rules’ generosity became known. Sources said that the provision for “certain mass-commuting vehicles” was devised by Ways and Means Chairman Dan Rostenkowski (D-Ill.) to give tax breaks that will help finance mass-transit vehicles in his home city of Chicago and in New York, the home state of several committee Democrats who supported him throughout his efforts to produce a tax bill.

California’s Goodies

California congressmen got their share of goodies. Sources said that Rep. Fortney H. (Pete) Stark Jr. (D-Oakland) successfully insisted on special tax treatment for “a specified amount of refunding bonds”--which turned out to be student loan bonds for California state universities.

Rep. Robert T. Matsui (D-Sacramento) obtained rules making it clear that interest from “tax increment” bonds, which are government bonds widely used in California for urban redevelopment, would remain tax free.

Other California projects that would benefit from special tax breaks include certain waste treatment facilities, the El Dorado Dam on the American River and the $1.6-billion Pacific Texas Pipeline, an oil pipeline from the Port of Los Angeles to Texas.