The Senate Finance Committee is aiming for next week to begin its consideration of how and whether to extend a bevy of temporary tax breaks that lapsed at the beginning of this year, such as the production tax credit (PTC) and other clean energy incentives.
Finance Chairman Ron Wyden (D-Ore.) told reporters yesterday afternoon that he hoped to convene a markup Wednesday to consider a bill that would reinstate the business tax breaks, which are collectively known as extenders. Wyden said he hoped the bill would extend the provisions for two years, but he stressed that details of the bill, including its duration, were still being negotiated.
Wyden said he worried that the economy could take a hit “if you just let these lapse without any way to promote innovation or renewable energy and other priorities,” although he declined to specify what would be included in the bill itself. Negotiations with Finance Committee ranking member Orrin Hatch (R-Utah) are continuing, and Wyden said the two would be releasing a joint statement detailing the package soon.
The wind industry seems cautiously optimistic that a PTC extension would be included in the package – a fairly safe bet given Wyden’s historical support for clean energy.
“We believe Chairman Wyden and a majority of the Committee are committed to extending recently expired renewable energy tax incentives for a workable period of time. A whole U.S. manufacturing sector is at stake, and an increasingly affordable source of domestic energy,” said Rob Gramlich, senior vice president of public policy for the American Wind Energy Association, in a statement to E&E Daily.
It’s not clear what will happen to nearly a dozen other energy-related extenders, which provide credits for activities including weatherizing homes, manufacturing efficient appliances and producing biofuels.
As expectations have mounted of the Finance Committee’s plan to act, an array of senators and outside interests have stepped up their lobbying on behalf of particular breaks.
Among other efforts, yesterday, Sen. Ed Markey (D-Mass.) led more than two dozen of his Democratic colleagues on a letter to Wyden urging an extension of tax breaks for renewable electricity, efficiency, biofuels and other priorities. Earlier this month, Sens. Mark Udall (D-Colo.) and Chuck Grassley (R-Iowa) sent a letter urging an extension of the PTC and related investment tax credit. And a coalition of biofuel trade associations sent a letter urging an extension of their tax breaks.
Wyden said he intended the extenders bill to provide a “springboard” to comprehensive tax reform, an effort that lost steam last year following former Finance Chairman Max Baucus’ (D-Mont.) resignation and a lack of enthusiasm for the effort among House Republicans. Sen. Ben Cardin (D-Md.), another member of the Finance Committee, described it as a “patch” that would prevent undue disruption to the economy until comprehensive reform could be completed.
“If this is a patch bill, I would hope we extend the energy provisions,” Cardin told reporters yesterday.
Whatever comes out of the Finance Committee will still have to pass the full Senate and House, where election-year concerns will color almost everything lawmakers do until November.
House Ways and Means Chairman Dave Camp (R-Mich.) seems to be softening his previous resistance to considering an extenders bill. In a memo to committee members earlier this week, Camp said he wanted to press forward with work on the comprehensive tax reform draft he put out earlier this year. But he also suggested an openness to considering some extenders separately.
Camp said another short-term extension would not be helpful and that the continued uncertainty surrounding those provisions confuses the debate over how much money is raised through the tax code – and hence how much must be offset in order to achieve a reduction of tax rates that is the central goal of his comprehensive tax reform plan.
“It is time for clarity in both policy and baseline,” Camp wrote.
“As such, beginning in April, the committee will continue its work by going policy-by-policy to determine which extenders should be made permanent. That process will include both hearings and mark-ups. Specific dates and topics will be forthcoming.”
Rep. Pat Tiberi (R-Ohio), who leads the subcommittee with jurisdiction over extenders, said one goal was to return to a process the committee began in 2012, the last year in which an extenders expiration loomed at the end of the year. Tiberi’s subcommittee held a series of hearings examining particular aspects from the more than 50 extenders typically lumped together, including one session on energy that focused heavily on the PTC.
“The plan is to kind of continue what we started – and that is, stop extending the extenders” without determining whether they actually benefit the economy, Tiberi told E&E Daily. “Make some permanent that will remain permanent.”
However, that debate likely will have to be revisited this year. Where the PTC enjoyed broad bipartisan support two years ago, it has more recently become a target of conservative groups, many of which receive contributions from fossil fuel companies, which portray it as wasteful spending. Camp’s comprehensive tax reform draft would not have extended the credit and even would have clawed back some of its value from prior recipients (E&E Daily, March 10).
The changed political dynamics have some PTC backers worried.
“I think everything is going to have a harder time – people are really sharpening their eye on this, as we should,” said Rep. Mike Thompson (D-Calif.), who introduced a bill to extend the PTC this session. “But I don’t know that there’s any of them I don’t worry about, and if there’s something I’m sponsoring, I’m pretty passionate about it.”
A second wind industry lobbyist, who discussed internal strategy on the condition of anonymity, said the industry does not expect a PTC extension to be included in whatever Camp produces. But the source noted the dozens of other lapsed provisions that also will need to be extended and have attracted less political heat. The source said the industry is hoping the Senate and White House insist on inclusion in the PTC and that there is enough pressure behind the broader package to get it through the House.
|Wind Watch relies entirely
on User Funding