CQ TODAY PRINT EDITION
Sept. 25, 2008 – 7:21 p.m.
House Sticks With Offsets for Tax Extenders
By Richard Rubin, CQ Staff
The House is drawing the boundaries of a tax fight with the Senate as it prepares to pass a $61.7 billion bill that shrinks the gap between the two chambers’ positions but leaves major unresolved differences.
The continued stalemate and the apparent lack of negotiations are worrying industry groups that depend on seeing their tax breaks extended. The dispute, over the extent to which Congress should offset the cost of extending expiring tax breaks, raises the possibility that many popular tax provisions will expire.
“We’re watching closely and hoping the House and Senate come together very soon,” said Greg Wetstone, senior director of governmental and public affairs at the American Wind Energy Association, which is trying to get the key tax credit for wind energy extended beyond Dec. 31. “This is crunch time, and I hope we see things get down to business very quickly.”
But, if anything, the two chambers ratcheted up their rhetoric and moved away from dealmaking as the majority leaders of both bodies urged each other to relent.
The House is set to vote Friday on its latest version of the bill (
Many companies and industry groups have avoided taking sides in the fight over offsets. But with the deadline looming, that may be shifting. Sen. Maria Cantwell , D-Wash., scheduled a Friday news conference with representatives of the solar-energy industry, Dow Chemical Corp. and Whirlpool Corp. to urge House passage of the Senate’s version of the legislation.
The House instead wants a “tax extenders” bill that follows the pay-as-you-go rule, which requires revenue-raising offsets to prevent the deficit from increasing.
“Fiscal responsibility is not something we can compromise on, especially not now,” said House Majority Leader Steny H. Hoyer , D-Md. Hoyer is backed strongly by the conservative Blue Dog Democrats.
Meanwhile, Senate Majority Leader Harry Reid urged the House to consider and pass the Senate’s version of a catchall tax bill (
“It would be a terrible shame to the American people that a small group of members of the House or Representatives would hold up this extremely important package,” Reid said.
After months of debate and failed cloture votes, the Senate voted, 93-2, on Sept. 23 to endorse an agreement reached by Finance Committee leaders that senators say is the only way to proceed. It includes a fully offset energy tax package, a one-year AMT “patch” without offsets, and a partially offset final section that includes mental health parity legislation, help for victims of natural disasters and provisions to extend expiring incentives through 2009.
The House pulled that compromise bill apart, separating it into four pieces. The House passed a fully offset mental health bill (
Rangel Makes Concessions
House Sticks With Offsets for Tax Extenders
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In crafting the final extenders bill, House and Ways and Means Chairman Charles B. Rangel , D-N.Y., made several important concessions to the Senate. He dropped one of his favorite provisions, a restructuring of incentives for New York that would allow the construction of a train between John F. Kennedy Airport and lower Manhattan. And he pushed the extenders through 2009, instead of through 2008, as he had previously wanted.
But he insisted on a fully offset bill, and he cobbled together revenue-raising provisions that have received Senate support, including higher taxes on the oil and gas industry, a measure targeting certain offshore deferred-compensation plans and a further delay of rules to help multinational corporations that pay interest in multiple countries. “We can wrap this up today if they don’t insist it’s their way or the highway,” Rangel said. “They should not miss this opportunity to pass this bill so we can make law and provide this tax relief to families and businesses.”
The White House, however, issued a veto threat on the new House bill and urged the House to accept the Senate version. The White House and Republicans argue that offsets are not needed when extending existing tax policy.
Rangel complained that the Senate had not sent over its bill for political reasons, presumably to force the House into accepting it as the session ends.
Each chamber will soon have several ways to move a bill to the president. The House could consider the Senate’s catchall bill. The Senate could take up any or all of the House’s four bills, but none of those scenarios seems likely.
David Clarke contributed to this story.
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