Dan Rostenkowski, the top tax writer in the House for 14 years who helped push tax measures through Congress that transformed the municipal bond market, died Wednesday at his home in Wisconsin. He was 82.
A big man at six feet two inches and well over 200 pounds, Mr. Rostenkowski was an old-style ward politician from Chicago who spent 36 years in Congress. He excelled at back-room wheeling and dealing and had an iron grip on the House Ways and Means Committee, which he chaired from 1981 to 1994 until he was indicted for embezzlement and misuse of federal funds. In 1996, he pleaded guilty to two counts of mail fraud and served 15 months in prison and two months in a halfway house. But President Bill Clinton pardoned him just before Christmas in 2000.
As chairman of the House tax-writing committee, he played a major role in crafting legislation that provided solvency for the Social Security system, reduced the federal deficit, imposed taxes on polluters to pay for cleanups, overhauled the federal tax code, and expanded the Medicare program. But muni market participants remember him most for the Tax Reform Act of 1986, which severely restricted the market by requiring issuers to rebate arbitrage profits, restricting the number of advance refundings that could be done, limiting the kinds of private-activity bonds that could be issued, subjecting PABs to the alternative minimum tax, and curbing tax breaks for banks that bought muni bonds.
Though the Tax Reform Act contained severe restrictions on munis, it was much less harsh than the original proposals unveiled by President Ronald Reagan and other lawmakers, and Mr. Rostenkowski received some credit for that.
“He was the ultimate great legislator who knew how to put together major pieces of legislation with bipartisan and bicameral support,” said Micah Green, a partner at Patton Boggs LLP who in the early 1990s was executive vice president of the Public Securities Association, now the Securities Industry and Financial Markets Association. “He understood that politics was the art of the compromise, but that the art of negotiation meant always being willing to walk away from the table. His ability to negotiate for many days at a time resulted in many important legislative achievements.”
Mr. Rostenkowski was “very supportive of making adjustments to improve the [muni bond] issuance environment for states and localities,” Green added.
“The chairman was always bigger than life,” said Frank Shafroth, who was director of policy and federal relations for the National League of Cities during Mr. Rostenkowski’s tenure. “He could switch from complex issues in the code to which of his constituents in a ward in Chicago had yapping dogs. He harkened back to another era when the government was focused on making the system work. He told me during the Tax Reform Act of 1986: 'If you have a majority of votes on my committee, I’ll talk to you. … Otherwise, don’t waste my time.’ Note, he didn’t say Democrats. He didn’t say Republicans. He simply said majority.”
Shafroth called Mr. Rostenkowski “a wizard” for being able to work with Reagan and “a crazy assortment” of lawmakers to pass the bill.
Mr. Rostenkowski is survived by his wife, LaVerne, and three daughters, Gayle, Dawn, and Kristie. His youngest daughter, Stacy Rosten-McDarrah, died in 2007. A public wake is to be held on Monday from 1:00 to 9:00 p.m. at the St. Stanislaus Kostka Church on Chicago’s North Side. A funeral service will be held Tuesday at 10:00 a.m,, with the burial to follow afterward at St. Adalbert Cemetary in Niles.