WASHINGTON — Rep. Charles Rangel’s resignation as chairman of the House Ways and Means Committee yesterday fueled speculation among muni market participants about who will replace him, with Rep. Richard Neal the favorite of most muni market participants despite the fact that four other committee members have seniority over him.

Though the New York Democrat characterized his departure yesterday as a temporary leave of absence until the ongoing ethics investigations against him are completed, most sources doubt the 79-year-old will return as chairman. A number of significant ethical issues involving Rangel are still under investigation.

“I don’t think he’ll be back,” said Howard Gleckman, a resident fellow at the Urban Institute specializing in taxes. “If you’ve got a guy who’s accused of not paying taxes, it’s pretty tough to be the chairman of the guys who write the tax laws.”

Rangel sent a letter to House Speaker Nancy Pelosi, D-Calif., requesting a “leave of absence” from chairing the committee, but House officials yesterday said they accepted his resignation.

Several names have been discussed among muni market participants as filling the top tax writer role in the future, with three getting the most attention: Reps. Fortney Pete Stark, D-Calif., Sander Levin, D-Mich., and Neal, a Massachusetts Democrat.

Stark is the highest-ranked Democrat after Rangel and assumed the chairmanship on an interim basis, but he told committee Democrats he would not remain as chairman, according to news reports. Several sources pointed out that Stark is 78 years old and that he would have difficulty building consensus among committee members, both Republicans and lawmakers in his own party.

Next in line is Levin. While some sources said he could become the next chairman, one market participant pointed out that the top Republican on the committee is Dave Camp, who also is from Michigan, and that Congressional leaders might be reluctant to have the top spots occupied by members of the same state.

But Neal is generating the most buzz among the market participants. Though he is the fifth-highest ranking Democrat on the committee after Rangel, he is a proactive advocate for the muni market and has played an important role in congressional consideration and approval of several muni-related tax provisions, sources said.

Neal also chairs the committee’s select revenue measures subcommittee, which held a hearing last May to discuss ways the federal government could subsidize governmental debt, including through Build America Bonds.

“I think he’d be an interesting choice,” Gleckman said. “He’s got the temperament for it, he knows the substance, but he’s also a guy who can build coalitions.”

Plucking a member from a relatively low-ranking position and immediately elevating him to the chairmanship would be an unusual move, Gleckman conceded. However, he said, “These are unusual times.”

For Neal to become chairman, Democrats would also have to bypass Reps. Jim McDermott, D-Wash., and John Lewis, D-Ga.

Rangel’s resignation comes just days after a report from the House Committee on Standards of Official Conduct publicly admonished him for accepting corporate-sponsored trips to the Caribbean in 2007 and 2008 for conferences — a violation of congressional gift rules. Though the committee said it could not prove Rangel personally knew the trips were sponsored by corporations like AT&T, Citigroup, and Pfizer, members of his staff were aware of the arrangement and Rangel is responsible for his staff.

Further, a number of allegations against the lawmaker from Harlem still need to be addressed, including his failure to report on federal tax forms $75,000 in rental income he earned from a villa he owns in the Dominican Republic and the issue of whether he received below-market rental rates on four apartments in New York City.

Whoever becomes committee chairman will have to address a number of muni bond issues in the near future, such as which temporary programs from the American Recovery and Reinvestment Act — including BABs and an increase to the bank-qualified limit — should be extended beyond their current deadlines at the end of the year.

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