Dan Rostenkowski, Democrat Who Steered Tax Policy, Dies at 82

Dan Rostenkowski, a product of Chicago’s fabled political machine who engineered U.S. tax policy, indulged in the perks of his job during 36 years in Congress and wound up in prison for misusing funds, has died, according to a Democratic official. He was 82.

He died today at his home in Wisconsin, the official said.

As chairman of the House Ways and Means Committee from 1981 to 1994, Rostenkowski was a Democratic rampart that three presidents had to navigate if they hoped to change U.S. tax laws as well as health and Social Security policies.

The grandson of Polish immigrants and protégé of legendary Chicago Mayor Richard J. Daley, Rostenkowski was “big, brash and bellowing -- a door slammer and, at times, a bully,” Jeffrey Birnbaum and Alan Murray wrote in “Showdown at Gucci Gulch: Lawmakers, Lobbyists and the Unlikely Triumph of Tax Reform,” an account of the Tax Reform Act of 1986.

That law was Rostenkowski’s best-known achievement. He worked with Republican President Ronald Reagan and other lawmakers to lower tax rates while ending enough deductions and shelters to avoid increasing the federal budget deficit.

He became something of a national celebrity for urging viewers, in a televised address, to send letters supporting tax reform to “Rosty, Washington, D.C.” Tens of thousands of letters came in that way, and for a time “Write Rosty” buttons were the rage on Capitol Hill.

Photographer: David McNew/Getty Images

Dan Rostenkowski, former chairman of the House Ways and Means Committee. Close

Dan Rostenkowski, former chairman of the House Ways and Means Committee.

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Photographer: David McNew/Getty Images

Dan Rostenkowski, former chairman of the House Ways and Means Committee.

His long career ended in an indictment, lost reelection, conviction and prison sentence.

“Chicago and the nation have lost a political giant,” said Representative Mike Quigley, an Illinois Democrat.

Power and Perks

A man of outsized appetites, Rostenkowski held court at a permanently reserved table at Morton’s steakhouse in Washington. An alcove there was designated “Rosty’s Rotunda.” He treated himself to the full range of treats available to those who wield power, such as accepting free vacations and fees for giving speeches.

“Maybe I was more extravagant than anybody else,” he told the New York Times in 2000. “But then again, I was a bigger man than everybody else.”

Elected to the Illinois legislature at 24 and Congress at 30, Rostenkowski never faced a serious political challenge until 1992, when federal prosecutors were reviewing his congressional and personal finances. He lost his House seat in 1994, after being indicted.

Federal prosecutors accused Rostenkowski of stealing more than $600,000 in government and campaign funds over 20 years. He pleaded guilty in 1996 to two counts of mail fraud for using official checks to buy a gift and to pay people who had done personal work for him.

Dispensing Gifts, Jobs

He insisted he had been singled out for behavior that was common in Congress. Dispensing gifts and hiring the children of friends was “my way of life,” Rostenkowski told Richard Cohen for his 1999 book, “Rostenkowski: The Pursuit of Power and the End of the Old Politics.”

Rostenkowski served 15 months in prison. After his 1997 release, he gave speeches and opened a consulting firm, Danross Associates.

President Bill Clinton pardoned his onetime ally in late 2000. Rostenkowski told the Chicago Tribune that while “thrilled” to have his conviction expunged, he knew the damage to his legacy was permanent:

“With all the legislation that I passed, with all the history that I’ve written with respect to the economics of the country, they’re always going to say there’s a felon named Danny Rostenkowski. That’s going to be the obituary.”

Patronage Jobs

Daniel David Rostenkowski was born on Jan. 2, 1928, in Chicago, the only son of Joseph Rostenkowski, an alderman who was part of the Daley political machine. Joseph and his wife, Priscilla, also had twin daughters.

At St. John’s Military Academy in Wisconsin -- where he shortened his name to “Rosten” -- Rostenkowski excelled in sports. He enlisted in the U.S. Army in 1946 and spent 15 months in Korea.

Returning to Chicago, Rostenkowski worked in patronage jobs arranged by his father. Restoring his last name to appeal to the heavily Polish-American district, he won seats in the state legislature in 1952 and 1954 and was elected to Congress in 1958. He joined the Ways and Means Committee in 1964.

He aspired to be House speaker and was on the rise in Democratic leadership until 1971.

During party elections that year, he positioned himself to be promoted to whip, the number three post. The new speaker, Carl Albert, vetoed the promotion, then arranged for a challenger to unseat Rostenkowski from the fourth-ranking post, caucus chairman. Albert’s disdain for Rostenkowski stemmed from the riotous 1968 Democratic convention in Chicago, when Rostenkowski -- following orders from President Lyndon Johnson - - had taken the gavel from Albert to restore order.

Revising Tax Policies

In 1981. Rostenkowski became chairman of the powerful Ways and Means Committee, placing him in the forefront of domestic policy.

Facing off with the Reagan White House for the first time, Rostenkowski “found himself backing a tax bill with business tax breaks so generous that even business lobbyists were stunned,” Birnbaum and Murray wrote.

During his successful re-election campaign in 1984, Reagan promised to simplify the tax code. He sketched out his proposal in a televised address in May 1985. Rostenkowski, not a naturally gifted speaker, agreed to deliver his party’s response.

Master Tactician

Calling Reagan’s proposal “a starting point,” he warned that the effort “comes down to a struggle between the narrow interests of the few and the broad interests of working American families.”

He concluded: “If you’ve never stood up for your rights as taxpayers, if you’ve never voiced your frustration and anger over the unfairness of today’s tax system, sit down and write a letter to Washington. Even if you can’t spell Rostenkowski, put down what they used to call my father and grandfather, ‘Rosty.’”

To win votes for the legislation, Rostenkowski handed out tax breaks and struck other deals with colleagues. When it appeared that lobbyists had sunk the reform effort, Rostenkowski made the game-saving decision to retain the popular deduction for state and local taxes.

28 Percent

The final law cut the top tax rate for individuals to 28 percent from 50 percent, removed millions of low-income workers from income-tax rolls and, by eliminating tax breaks, shifted an estimated $120 billion in tax liability from individuals to corporations over five years.

The lower rates would be nudged upward by Presidents George H.W. Bush in 1990 and Clinton in 1993, to reduce the federal deficit. President George W. Bush cut them again beginning in 2001.

Rostenkowski told Bloomberg News in 2005 that the great challenge, and ultimate success, of 1986 was matching tax cuts, dollar for dollar, with eliminations of loopholes and tax increases on corporations. “Since I left 10 years ago, it’s been so goddamn easy to cut taxes,” Rostenkowski said. “It’s so easy to walk around with sugar. It’s when you administer the vinegar that shows the chemistry and aptitude of the legislator.”

In his final years in Congress, Rostenkowski became an ally of Clinton, calling publicly for a “broad tax increase” to finance an unsuccessful bid to enact universal health care. Rostenkowski was stripped of his committee chairmanship after being indicted in 1994 -- a blow to Clinton’s health-care initiative -- and was ousted by voters that November.

Survivors include his wife, LaVerne, and three daughters, Dawn, Kristie and Gayle. Their youngest daughter, Stacy, died in 2007.

To contact the reporter on this story: Laurence Arnold in Washington at larnold4@bloomberg.net.

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