Conservatives tie PTC to Obama agenda in bid to sink lame-duck deals

Source: Nick Juliano, E&E reporter • Posted: Friday, November 7, 2014

Fearing a potential lame-duck compromise that would extend a key renewable energy tax credit, dozens of conservative groups are warning newly empowered Republicans that extending the credit would amount to an endorsement of President Obama’s broader climate change agenda.

The warning comes following a wave election that will sweep Republicans into control of the Senate next year and ahead of a brief session this month in which Democratic leader Harry Reid (Nev.) will still control the upper chamber. A top order of business for the lame-duck session is reinstating a variety of expired tax incentives, but the House and Senate cannot agree on the scope of the package or whether it would include the production tax credit, which benefits wind and other forms of renewable electricity.

While some Republicans in windy states say they support the credit, the network of conservative groups fighting the PTC — many of which have been linked to the industrialist Koch brothers — are trying to link the credit to broader Obama policies that have been condemned by the GOP.

The American Energy Alliance and 66 other groups sent a letter today to House Speaker John Boehner (R-Ohio) and Senate Minority Leader Mitch McConnell (R-Ky.) arguing that allowing the PTC to be extended this year would sacrifice leverage in upcoming tax reform negotiations and hand Democrats a win.

“Rejecting efforts to extend the PTC is a meaningful way for this Congress to oppose the president’s climate plan,” the groups write. “A vote for extending the PTC is a vote for the president and the majority leader’s agenda.”

The letter comes amid intensifying negotiations over the postelection lame-duck session. Throughout the year, House Ways and Means Chairman Dave Camp (R-Mich.) has been pushing to make a few extenders permanent, such as the research and development tax credit, while eliminating the rest. His Senate counterpart, Finance Chairman Ron Wyden (D-Ore.), wants to extend all of the credits through next year to provide breathing room for more comprehensive tax reform in the upcoming Congress.

The extenders lapsed at the end of last year, and the Internal Revenue Service has said Congress risks complicating the upcoming filing season if it does not reach a deal on extenders this year.

Several tax lobbyists say House Republican leaders have demonstrated a desire to “clear the decks” and suspect they would be willing to go along with Wyden’s extenders bill. A senior House GOP aide said earlier this week that the PTC would not be in whatever package initially comes to the House floor, but allowed for the possibility that it could eventually be adopted as part of negotiations with the Senate.

Killing the PTC has been a top priority this year of AEA and other Koch-linked groups, and the letter indicates some worry that House leaders do not share that passion.

“The letter is, in part, an expression of concern among groups that are usually aligned with Koch (and the conservative movement) that House leadership is starting to stray pretty far off the reservation with respect to tax extenders,” said Mike McKenna, a Republican lobbyist whose clients include a Koch Industries affiliate. “It has the potential to be a significant source of conflict.”

It remains to be seen how congressional Republicans will respond, especially in the wake of a massively successful election in which several business-friendly Republicans managed to fend off tea party primary challenges earlier in the year.

“Nobody’s in danger right now,” a Republican aide said, suggesting that although lawmakers may not respond to this request, it is unlikely to lead to a broader rift between the GOP and the Koch brothers. “I don’t think there’s any chance that divorce papers are being drafted.”

Wind industry officials say they remain cautiously optimistic that the PTC will be extended during the lame duck.

“Both House and Senate R’s seem to want to get tax extenders off their plate,” one wind lobbyist said in an email.

A spokesman for the American Wind Energy Association dismissed the letter as more of the same from “Koch-funded front groups” that for years have been fighting the policy, which wind boosters say creates jobs in rural communities and the manufacturing sector.

“Their opposition to wind power is out of sync with the bipartisan support Republicans, Democrats and independents and the vast majority of Americans all have for homegrown wind energy,” said Peter Kelley, AWEA’s vice president for public affairs. “Two of the Senate’s recently elected newcomers, Republicans Cory Gardner of Colorado and Joni Ernst from Iowa, have both supported an extension of the production tax credit because they’ve seen how wind power fosters economic growth and creates jobs back home.”