A nervous silence descended yesterday over Washington lobbyists as they kept up a "Rosty watch," asking one question: What plan will Rep. Dan Rostenkowski (D-Ill.) put before his House Ways and Means Committee as the tax portion of a five-year, $500 billion deficit-reduction plan?
It is called "the chairman's mark," and no piece of paper was more coveted in official Washington yesterday as House financial committees began the task of putting detailed legislation into the blanks of the new congressional budget agreement.
Word spread rapidly that Rostenkowski, like President Bush and Senate Finance Committee Chairman Lloyd Bentsen (D-Tex.), was prepared to support a swap of higher income tax rates on the wealthiest taxpayers in return for a lower tax rate on capital gains. But hundreds of other tax issues remained to be resolved.
Until they see how badly their interest group might be hurt, many lobbyists remained out of sight, giving Capitol Hill the appearance of calm, the kind that comes before a storm.
"At this point, what you want to know desperately is how you're taken care of in that mark," said a senior Capitol Hill aide.
The major exceptions are groups representing the elderly, who always lobby hard, and the transportation industry -- truckers, railroads and airlines -- who are already sure they will take a financial beating. Their only question is, "How bad?"
The American Trucking Associations set up a 100-person phone bank to call truckers across the country 15 hours a day and ask them to contact their members of Congress in a damage-control operation. A railroad industry source said, "We're pulling out all the stops" with calls from major railroad officials nationwide and local lobbyists.
Sources close to the committee and the industry said the most likely committee scenario is a 9 cents-a-gallon fuel tax increase for motorists and truckers -- rather than the 12-cent tax in the compromise defeated last week; an increase from 8 percent to 10 percent in the airline ticket tax and probably the first fuel tax on railroads, which traditionally do not pay fuel taxes into the highway trust fund because they own their own tracks.
President Thomas Donohue of the American Trucking Associations said it is unlikely his industry can avoid tax hikes. His lobbying effort, he said, is aimed at holding the taxes as low as possible and making sure that as much as possible is spent for highways.
"That's the worst it's going to get, and it could get better," he said of the 9-cent tax rate report.
Worse for the trucking and airline industries is the likelihood that Congress for the first time will use fuel and ticket tax revenues for general spending rather than depositing them in the trust funds for highways, airports and airways. This would be the equivalent of cracking the industries' holy grail, something few of them imagined could happen before the budget crunch this month.
Sources said at least half the fuel tax funds and perhaps all the 2 percentage-point increase in the ticket tax might go to general revenues.
"It violates every principle of why the trust fund was established in 1970," said Larry Barnett, vice president for government affairs of the Air Transport Association.
Barnett said the tax itself will hurt the industry in a year when every major U.S. airline is expecting losses because of rising fuel prices and a softening economy. "The prospects for us over the next three years are just disastrous," he said.
As usual, lobbyists for groups representing the elderly did not hold back.
"If you haven't lobbied until now, it's over with," said John Rother, legislative director of the 30 million-member American Association of Retired Persons. "Anyone who waits until tomorrow is out of it. It's going to move fast. It's got to move fast."
The National Committee to Preserve Social Security and Medicare sent 2 million letters over the weekend urging members to send postcards to Congress. "We only have days to act," said the mailings.
But most lobbyists yesterday were gathering intelligence before deciding what to ask for.
"We're getting faxes and that sort of thing," said a staff member of a senior Republican Ways and Means member. "But they're not coming into the office the way they used to."
Reporters entering a Senate Finance Committee briefing had to push their way through a hallway crowd of lobbyists seeking any hint of what was said inside.
"I guess you could say we're sort of standing pat," said Walker Merryman, vice president of the Tobacco Institute, the main tobacco industry lobbying arm. Translation: the industry has accepted the 8-cents-a-pack increase in the budget agreement and hopes, in Merryman's words, "They're not going to do any more to us than they did before."
"It's been very quiet," agreed Scott D. Ballin, vice president for legislative affairs for the American Heart Association. He said the anti-smoking "Coalition on Smoking or Health" has sent letters asking Congress to boost the tax to 16 cents a package, but would view any increase as a victory.
"We always advocated a doubling of the tax, but we'll take what we get," he said. Ballin said he expected tobacco lobbyists would be "trying to preserve the status quo," the 8-cents-a-pack increase. "I think they would rather get looted than shot to death."
Douglas W. Metz, managing director of the Wine and Spirits Wholesalers of America, said liquor lobbyists are waiting to see "what the chairman's mark is. It's the next moving target."
Staff writers John E. Yang and Steven Mufson contributed to this report.