‘Peace Dividend’ Already Spent, U.S. Mayors Told

The chief tax-writer of the House of Representatives today bluntly dashed the hopes of mayors seeking billions of dollars of the expected “peace dividend” for their cash-poor cities.

“There’s no money to pay for such programs,” House Ways and Means Committee Chairman Dan Rostenkowski told the U.S. Conference of Mayors. “The peace dividend is already going to be swallowed.”

Rostenkowski said budget negotiations between Congress and the White House are going “fairly well.” But he said the budget is unlikely to include more money for cities.

“We need to slash spending and raise taxes merely to reach ground zero,” the Chicago Democrat told more than 200 mayors meeting in his home city.

Two Democratic mayors challenged Rostenkowski to confront President Bush and demand that aid to cities be increased. They said the $500 billion or more needed to bail out the savings and loan industry should be found elsewhere.

“We haven’t got the votes,” Rostenkowski said. He broke off the questions and left the meeting after telling the mayors good-naturedly: “I’m going to tell you like it is. If you don’t like it, too bad.”

While the mayors expressed affection for Rostenkowski, a supporter of their causes, they did not like the message.

“The cities are in desperate need,” Atlanta Mayor Maynard Jackson said. “I really don’t feel we have a partner in Washington.”

Rostenkowski said he was prepared to support an array of new taxes. But he said his fellow Democrats want Bush to be the first one to propose new taxes.

Rostenkowski was the first of two congressional Democrats to address the mayors on the first full day of their summer meeting. Nebraska Sen. Bob Kerrey was to address the mayors at lunch.

Rostenkowski delivered the dour message to the mayors a day after they gave initial approval to a broad, costly domestic agenda that calls on Congress to abandon the Gramm-Rudman law, complaining the deficit-reduction measure unfairly chops urban programs first.