CQ TODAY PRINT EDITION
Oct. 1, 2008 – 8:14 p.m.
Senate Adds ‘Tax Extenders’ to Economic Bill
By Richard Rubin, CQ Staff
The Senate’s decision to add its “tax extenders” bill to economic recovery legislation puts even more lobbying clout behind the effort to sway wavering House members.
From rural school districts to solar energy companies to film producers, interest groups with little or no stake in the original bailout bill (
Their goal: Bring at least 12 House members from “no” to “yes” by emphasizing the tax goodies sprinkled throughout the new bailout bill (
The renewed optimism and energy among tax lobbyists marks a sharp turn from the morning of Sept. 29, when it appeared that Congress would adjourn for the election, if not the year, without extending dozens of expired and expiring tax breaks.
“Tax extenders has truly risen from the dead, and in doing so it has sparked life into this financial rescue bill,” said Ashley Miller, director of congressional affairs at the U.S. Chamber of Commerce.
The Chamber, the financial services industry and many other groups were already trying to resurrect the bailout bill. But Senate leaders’ decision to add the extenders package brings a whole new list of advocates that have close ties to specific clusters of lawmakers.
“Our members were supportive [of the bailout bill], but it wasn’t really our focus. It is now,” 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.
The Senate’s tax bill, which passed, 93-2, on Sept. 23, would provide incentives for renewable energy production and conservation, “patch” the alternative minimum tax (AMT) for 2008, extend expiring tax incentives through 2009 and help victims of natural disasters. It is partially offset with revenue increases that would hit the oil and gas industry and hedge-fund managers.
Senate Finance Committee members assembled the tax bill carefully, to break a months-long logjam. They sprinkled it with targeted provisions: a child tax credit expansion for liberal Democrats, new coal tax breaks for Midwestern senators, extra help for Midwest flood victims and Gulf Coast hurricane victims, benefits for Alaskan fishermen, and beefed-up incentives for domestic film production.
Now the groups that were frustrated by the lack of action on taxes by this Congress are turning their attention to the House and the bailout bill. About 700 groups and companies sent a joint letter to lawmakers on Wednesday, asking for the extenders to become law.
Jane O’Keeffe of the Forest Counties and Schools Coalition said she was “delighted” to hear that the Senate’s extenders bill would be added to the bailout bill. It includes $3.3 billion for a program that provides payments to rural counties with significant amounts of federal land. House Republicans from the West had sharply criticized Democrats for failing to consider the Senate bill.
“I really hope that the House takes a good hard look at it and supports the bill,” O’Keeffe said. “I think that it’s good for rural schoolchildren all over the United States.”
The coalition of extenders lobbyists has avoided taking a stand throughout the past year on the procedural fight over how their provisions get enacted. At times, that standoffishness generated frustration among lawmakers who wanted the weight of industry groups on particular bills, but the strategy, Wetstone said, served the coalition well.
Senate Adds ‘Tax Extenders’ to Economic Bill
“Whenever there’s a vehicle up there that has our stuff in it, we’re pushing,” he said. “And that there’s where we are right now.”
Pushing for Offsets
Lawmakers have been fighting over the tax extenders for most of the 110th Congress, starting in late 2007 when the House passed a bill (
House Democrats, led by Majority Leader Steny H. Hoyer of Maryland, have insisted that the extenders be paired with offsets, even as they allowed the 2007 AMT patch (PL 110-166) to become law without offsets.
Senate Republicans, meanwhile, used their procedural clout to block House-passed legislation, and both parties compromised on offsets to cut a deal. In the Senate bill, the AMT is not offset, the $18.3 billion energy package is fully offset and the remainder of the extenders are partially offset.
The House responded with a four-bill strategy, passing a mental health parity bill with offsets (
The chambers have some policy differences, but they are not far apart on the numbers. The Senate bill contains $150.6 billion in tax breaks and $43.5 billion in offsets. All combined, the four House bills that mirror the Senate legislation contain $137.7 billion in tax breaks and $65.7 billion in offsets.
They are, however, far apart on the principle of offsets, and Hoyer stood with the Blue Dogs on Monday and said he would not bring the Senate bill to the House floor, arguing against legislating by “blunt force.”
He softened that position on Wednesday, issuing a statement that said he would “likely” bring the economic rescue bill to the floor Friday if there is bipartisan, majority support.
Now, because of the addition of the extenders, key Blue Dog members such as John Tanner of Tennessee and Allen Boyd of Florida are switching their positions on the bailout bill from “yes” to “undecided.” Several others, including Dan Boren of Oklahoma, Melissa Bean of Illinois and Jim Cooper of Tennessee, still plan to vote for the bailout bill, even with the tax extenders.
A tide of House Republicans may overwhelm any Blue Dog defections, but even if the Senate’s strategy succeeds, the move may have broader ramifications for tax policy next year, if the poisoned feelings between House and Senate tax writers persist.
“I hope that this Senate gamble is not accepted as some new constitutional attitude by their leadership,” Ways and Means Chairman Charles B. Rangel , D-N.Y., said in a statement. “We have a process in the House; we introduce bills, hold hearings and then markups before reporting to the floor where measures are debated before a final vote. Apparently, in the Senate, they just decide what can get 60 votes and insist the House follow suit. There is something wrong with this, not just for this Congress, but for those to follow.”
Asked whether the Senate move could lose Democratic votes in the House, Senate Majority Whip Richard J. Durbin , D-Ill., responded, “I can’t say. I don’t know how to balance that equation in terms of what we may lose on the Democratic side.”
Senate Adds ‘Tax Extenders’ to Economic Bill
Durbin said he hopes House Democrats “realize what we realize – this is a root canal. . . . We have to get this done.”
Liriel Higa and Joseph J. Schatz contributed to this story.




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