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– TAXES
Updated Sept. 28, 2008 – 9:09 p.m.
House to Try Again Monday on Tax Extenders
By Richard Rubin, CQ Staff
House Democrats seem to have a new motto when it comes to year-end tax legislation: If at fourth you don’t succeed, try, try again.
Despite repeated rebuffs from the Senate, and despite the four other bills already passed last week, the House Monday will consider and pass two more “tax extenders” bills (
The bills are designed to satisfy conservative Blue Dog Democrats who care about pay-as-you-go rules, but they don’t seem likely to breach what Ways and Means Chairman Charles B. Rangel called the “wall” in the Senate.
“This move in the House endangers tax relief that American businesses and families need right now,” Senate Finance Chairman Max Baucus , D-Mont., said in a statement. “While I commend the House’s effort to fully offset the cost of this needed tax legislation, it is clear to me from discussions in the Senate that even this new package of bills will not pass in this body.
The House Rules Committee approved a closed rule for the bills late Sunday by voice vote.
Senators continue to insist that the House consider and pass the catch-all bill (
House Majority Leader Steny H. Hoyer , refused to answer directly when asked whether he would allow Congress to adjourn without extend the tax breaks or whether he would allow the House to vote on the Senate bill.
“We’ll have to make that decision when and if they do that,” said Hoyer, D-Md.
The standoff leaves hanging millions of middle-class families who could face the alternative minimum tax. Among other groups that could see crucial tax benefits lapse in the absence of an agreement are financial-services companies that do business overseas and producers of electricity from wind power.
At issue are dozens of tax breaks that expired at the end of 2007, and more are set to lapse Dec. 31.
Debate over these issues has lingered for the entire 110th Congress. Now, with the session winding down, tax writers are under pressure to find a compromise before Congress leaves town for the elections and comes as tax writers are busy writing the tax portion of the financial rescue bill.
The effort marks the Democrats’ latest attempt to comply with pay-as-you-go budget rules and still satisfy Senate Republicans, who do not want revenue-raising offsets paired with extensions of existing tax policy.
But the fundamental disagreement over the principle of offsets continues to make any easy resolution difficult.
House to Try Again Monday on Tax Extenders
The Senate’s bill would patch the AMT, extend expiring provisions, provide incentives for renewable energy production and conservation and help victims of natural disasters.
After months of false starts and failed cloture votes, the Senate finally agreed to its compromise. Since then, senators from both parties have insisted that the House clear the Senate bill.
“Some sparring between House and Senate is inevitable at the end of session,” said Sen. Ron Wyden of Oregon, a Finance Committee Democrats who said he had been talking with House leaders. “This is particularly challenging because there is so much on the table that you’re trying to follow both substance and process. I like to think we’re making a little bit of headway.”
Last week, however, the House took that Senate compromise and broke it into four pieces and easily passed all four in separate bills: mental health parity legislation with offsets (
The approach fell flat in the Senate. Now, House leaders split that final bill into two more: an energy tax bill and a collection of other tax extensions, which also include mental health parity and a $3.2 billion extension of a program that helps rural counties with significant amounts of federal land.
Jim Manley, a spokesman for Senate Majority Leader Harry Reid , D-Nev., declined to comment on the House’s latest bills or whether the Senate would consider anything the House has sent over.
“They don’t like our bill, but I think they have to take it,” said Sen. Orrin G. Hatch , R-Utah, a member of the Senate Finance Committee.
Still, the two chambers aren’t terribly far apart in numbers.
But inside those numbers is a fierce debate. Blue Dogs, having already conceded defeat on the AMT patch and the disaster bill, are making a stand on the extenders. Backed by Hoyer, the House group of fiscally conservative Democrats worry about the growing national debt and want to prevent the tax bill from costing the government.
Republicans, however, say extensions of existing tax breaks should not be offset, and have used their procedural clout in the Senate to block Democratic efforts to move House-passed bills.
Some members have objected to the specific revenue-raisers in the Senate bill, but for the most part, those are not controversial. They would largely hit oil and gas companies and certain offshore deferred-compensation plans.
The House and Senate do disagree on other details. Senators, led by Charles E. Grassley of Iowa, insisted on a disaster tax package that provided more generous benefits for flood victims in the Midwest and hurricane victims on the Gulf Coast than for other regions.
The Senate also included more provisions that help the coal industry, Alaskan fishermen and commercial recyclers.
House to Try Again Monday on Tax Extenders
The House, meanwhile, wants limits on the wind-energy tax credit and seeks a different structure for a new credit for electric automobiles.
First posted Sept. 28, 2008 5:35 p.m.
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