When House Speaker John Boehner (R-Ohio) said yesterday that he wants a vote before the election aimed at avoiding the “largest tax increase in American history” looming at year’s end, he did not point to wind energy developers who would see higher costs without an extension of their prized temporary tax break.
Nonetheless, backers of the proposal are seeing brighter prospects that companies that rely on the expiring production tax credit, or PTC, may not have to wait until the eleventh hour for a reprieve. Lawmakers and industry lobbyists see a growing interest in the House and Senate tax-writing committees to get a PTC bill to the floor before November, and some point to the uptick in activity from conservative PTC opponents as a sign that the move to extend the credit is gaining some steam.
“I have been cautiously optimistic that one way or another we’ve got at least a 50 percent chance of passing the PTC before the election,” Rep. Earl Blumenauer (D-Ore.) told E&E Daily yesterday. “It has broad bipartisan support; the business community is focusing on the consequence we’re already seeing, a dramatic dropdown in economic activity. And I think almost everybody thinks that it’s ultimately going to be extended.”
Blumenauer, a member of the House Ways and Means Committee, said there is “significant interest” among his fellow tax-writers to get a PTC extension to the floor quickly, but he cautioned that the path for such legislation remains unclear because of other pending business such as the transportation bill and election-year politicking.
“I think people are cautious because you have to separate the real work from the stuff that people have to go through for political measures,” he said. “But I’m optimistic that something will happen. It should happen.”
Blumenauer and Rep. Dave Reichert (R-Wash.) have introduced a bill to extend the PTC through 2016 that has garnered 99 co-sponsors from both parties.
“I think at some point people would like to show a little progress before the election,” Blumenauer added. Extending the PTC “would seem like a no-brainer. … Show some bipartisan progress and we can do something.”
Several wind industry lobbyists, who were granted anonymity to speak candidly, said yesterday they also sensed growing interest on Ways and Means and the Senate Finance Committee to act on a PTC extension before November but cautioned that it was too soon to say whether those efforts ultimately would be successful.
Rep. Steve King (R-Iowa), one of the PTC’s strongest proponents among House conservatives, said he saw growing support for the credit to be extended, judging by the increase in opposition from opponents of the measure.
“I do think that we’re picking up some momentum for the wind production tax credit. Part of my measure is because some of the others are starting to push back a little bit harder than they otherwise would, so they can see we’re picking up some momentum,” King said in a brief interview yesterday.
The conservative editorial page of The Wall Street Journal has run several recent items targeting the PTC and other renewable incentives, while anti-tax activist Grover Norquist, the president of Americans for Tax Reform, last week lent his support to a competing bill that would eliminate the PTC and several other energy tax breaks.
In his speech yesterday, Boehner cautioned that “any sudden tax hike would hurt our economy” and pledged that the House would vote before the election on a bill to prevent tax hikes while creating a mechanism to ensure Congress tackles “broad-based reform” next year (E&ENews PM, May 15).
It remains unclear where temporary tax extenders like the PTC will fit into the plan Boehner has outlined, which was seen primarily as a call for an early vote to extend the 2001 and 2003 tax cuts for all earners. However, industry backers say the logic Boehner laid out in his speech should easily apply to their tax treatment, as well, because a higher tax bill would cost the industry jobs and damage its contribution to the broader economy.
The American Wind Energy Association says 37,000 jobs will be lost this year if the PTC is not extended immediately.
Beyond the economic argument for an immediate extension, the combination of a short-term PTC extension that could fit into Boehner’s tax package and an eventual phaseout is one that has gained favor among many Republican backers of the credit, as well as the chairman of a key House subcommittee overseeing temporary extenders (E&E Daily, April 27).
“What we really need is an extension of the production tax credit and coupled with that extension an agreement that we’ll come back at the end of that period of time with a plan to phase the credits down,” King said. “And who can say no to all of that?”
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