Levin Becomes Interim Ways and Means Panel Chairman

Bloomberg News | By Ryan J. Donmoyer and Mark Drajem

Michigan Representative Sander Levin, a union-backed Democrat who backs higher taxes on private-equity firm executives, has become acting chairman of the U.S. House Ways and Means Committee following the departure of Representative Charles Rangel amid an ethics investigation.

“I’m acting chairman pending the decision of the ethics committee” on other allegations against Rangel, a fellow Democrat from New York, Levin told reporters in Washington today.

Levin, 78, has focused much of his 14-term career in Congress on trade policy. Levin, who speaks slowly and deliberately without raising his voice, has also been the committee’s leading critic of tax preferences for hedge funds and private-equity funds in recent years.

He will be tasked with crafting legislation sought by President Barack Obama to extend more than $1 trillion of tax cuts for Americans who earn less than $250,000 annually that are scheduled to expire Dec. 31. He’ll also play a direct role in negotiating the final health-care overhaul bill that Obama yesterday demanded an “up or down vote” on in Congress within weeks.

Levin’s ascension tamps down, for now, the furor over Rangel, admonished last week by the House ethics committee for accepting corporate-sponsored travel in violation of House gift rules, though perhaps unknowingly. The ethics committee is investigating other allegations at Rangel’s request.

‘Powerful Advocate’

“As chairman, Sandy Levin will be a powerful advocate for addressing the urgent needs of the American people,” House Speaker Nancy Pelosi, a California Democrat, said in a statement.

Levin is a “progressive income tax man,” said Mark Bloomfield, president of the American Council for Capital Formation, which advocates lower tax rates on investment income and is often at ideological odds with the Michigan lawmaker. “His intellect is unparalleled on the committee,” he said of the Harvard University graduate.

Levin in recent years has proposed legislation cracking down on the ability of hedge funds to use phantom offshore companies to avoid U.S. taxes on their profits. He was also the force behind a proposal to revoke the 15 percent capital gains tax treatment of “carried interest” paid to managing partners at private equity firms and hedge funds that profit from long- term investments.

Auto Workers

Levin, who represents a Michigan district with manufacturers and auto workers and formerly headed the panel’s trade subcommittee, is a leading congressional critic of a pending free-trade agreement with South Korea. While Rangel pushed the Obama administration for a commitment on when it would move another trade accord with Colombia, Levin advocated a more deliberate approach for those pending deals.

“Any glimmer of hope that there was for a trade agenda, just vanished,” Sean Spicer, a trade official in former President George W. Bush’s administration, said in an interview. With Rangel in place “you could always hope to go over Levin and work around him. You can’t go around the chairman.”

In the past, Levin played a nuanced role on trade. At the end of President Bill Clinton’s administration, Levin was a key supporter of China’s entry into the World Trade Organization, which helped overcome opposition from labor unions and get the measure approved in Congress.

Bush-Era Deals

He backed Bush-era deals with Australia and Peru, and led the Democratic opposition to the Central American Free Trade Agreement. As much as his positions, it was often his professorial style that caused consternation.

Levin “is very thoughtful on the issue of trade,” William Morley, a lobbyist for companies that support the pending trade deals, said in an e-mail. “We are hopeful that we can translate that thoughtfulness into action.”

Levin jumped from the trade subcommittee to the Social Security subcommittee in 2005, and led Democratic efforts to foil Bush’s efforts to overhaul that system.

Rangel surrendered his gavel yesterday following his admonishment last week by the ethics committee for violating a chamber rule on gifts. Some of his fellow Democrats had been pressuring Rangel to step aside.

‘Leave of Absence’

Rangel described his departure from the post as a “leave of absence” pending further findings by the House ethics committee.
Levin’s becoming acting chairman is “the best thing for the country, the Congress and the committee under the circumstances,” Rangel told reporters today. “I love him. He’s good, he’s thorough, he has a reputation and he’s going to do us well.”

“Levin is a good caretaker if Charlie is truly coming back — he has a mild temperament combined with an institutional memory stretching back to before the 1986 Tax Reform Act,” said Jeff Trinca, a lobbyist at Van Scoyoc and

Associates and a former Senate aide.

Mike Wessel, a long-time friend of Levin’s who served as general counsel for former House Majority Leader Richard Gephardt, a Missouri Democrat, said in an interview the new chairman would bring “a different level of activism” to the committee than did Rangel, most likely focusing on ways to help manufacturing.

“Sandy understands and appreciates the importance of manufacturing in our economy,” Wessel said.

Stark’s Preference

Representative Pete Stark of California, who became acting chairman yesterday when Rangel stepped down, submitted a letter giving up the acting chairmanship to the House today, saying he preferred to remain chairman of the health subcommittee.

“Once we pass health reform, it will take careful oversight to make sure that it is being implemented correctly,” Stark said in a statement. “I have chosen to remain chair of the health subcommittee and look forward to working with my colleagues on these vital priorities.”

In campaign contributions, Levin has received more money from lawyers than any other source since 1989, with a total of $779,754, according to the Washington-based Center for Responsive Politics. The next largest group of donors are health professionals, with $509,695. Of his 20 top donors since 1989, 15 are labor unions, including the American Federation of State, County and Municipal Employees with $91,250 and the International Brotherhood of Electrical Workers with $90,200.

He said he would meet again with the committee’s Democrats on March 9 to discuss the panel’s agenda, and begin reaching out to Republicans.

Top Republican

Representative Dave Camp, the panel’s top Republican and a fellow Michiganer, said, “Sandy and I have had a long and good working relationship, especially when it comes to the Research and Development Tax Credit, and I expect that to continue.”

Levin is the brother of Senator Carl Levin, 75, a Michigan Democrat.
The House ethics committee admonished Rangel last week for violating gift rules by accepting corporate-sponsored travel, though it said he may not have known about the sponsorship. The panel is still considering claims that he violated ethics rules by soliciting charitable donations on congressional stationery, failing to pay taxes on income from rentals of his Dominican villa, and keeping multiple rent-controlled apartments in New York.