The Senate’s top Republican tax-writer today dismissed efforts to phase out a key renewable energy incentive over several years, saying it lacks “credibility” and indicating that a brief renewal included in a larger stopgap tax bill expected to pass by next week would likely mark an end to the credit.
Sen. Orrin Hatch (R-Utah), who will chair the Finance Committee next year, said he expected passage of a bill to renew the production tax credit (PTC) along with dozens of expired tax breaks through the end of the year, although he planned to meet today with current Finance Chairman Ron Wyden (D-Ore.), who has been pushing for a longer extension.
The one-year “tax extenders” bill, which is expected to pass the House this evening, follows the collapse of broader negotiations that would have phased out the PTC gradually through 2017, rather than bringing it to an abrupt end next year. While Congress will again have to address extenders next year if the stopgap measure passes, Hatch suggested dim prospects for future efforts to phase out the PTC.
“We’ll look at everything, but I wouldn’t give much credibility to where that will go,” Hatch told reporters today in the Capitol in response to a question about the PTC’s future.
Debate over the PTC, which primarily benefits wind energy, has been a subplot to broader efforts to dispense with tax extenders once and for all as a precursor to tax reform. Before White House objections scuttled the effort, Ways and Means Chairman Dave Camp (R-Mich.) and Majority Leader Harry Reid (D-Nev.) were close to a deal last week to make 10 extenders permanent, renew the rest through next year and phase out the PTC.
Inclusion of a brief PTC extension in the House bill, H.R. 5771, drew fire from both left and right today. Clean energy supporters said anything short of a two-year extension would cause thousands of layoffs, while conservative groups said the credit should not be renewed at all, citing its high price tag (E&E Daily, Dec. 3).
Hatch’s comments underscore fears among PTC proponents that the new Republican majority in the Senate next year will spell doom for the credit. Still, it enjoys support from Republicans in windy states, such as Sens. John Thune of South Dakota and Chuck Grassley of Iowa. A Senate GOP aide said earlier this week that the idea could still gain traction next year, and Rep. Kevin Brady (R-Texas), a senior member of the House Ways and Means Committee, also said it could be resurrected in future tax talks.
Earlier this year, when the Finance Committee marked up a two-year extenders bill, Hatch backed an amendment from Sen. Pat Toomey (R-Pa.) that would have eliminated the PTC extension. The amendment failed 6-18 with five Republicans voting against it (Greenwire, April 3).
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