Energy incentives may be back on the table
House Ways and Means Chairman Kevin Brady (R-Texas) is in talks about more tax extenders legislation and fixes to the GOP tax overhaul. C-SPAN
An upcoming push by congressional Republicans to fix a number of technical glitches in the 2-month-old rewrite of the tax code may provide a new opening for energy and other interest groups seeking changes for key incentives.
House Ways and Means Chairman Kevin Brady (R-Texas) acknowledged this week what has long been expected — that Congress will need to pass a “technical corrections” bill to fix unintended consequences of the historic rewrite of the tax code President Trump signed into law in December.
“In the first rewrite of the entire code in 31 years, it’s routine to have some areas where industry or families want more clarification on,” Brady told reporters. “So we are actively seeking the technical corrections that people are suggesting or that they are seeking clarification on.”
Brady’s committee is also “aggressively seeking” feedback from stakeholders on ways to “fine-tune the tax code” based on the new law, he said, adding that the corrections bill is “likely” to be tacked on to the omnibus spending measure that is under assembly ahead of the March 23 expiration of the existing funding resolution.
Ways and Means Committee member Kenny Marchant (R-Texas) said the panel is hearing plenty from backers of various renewable energy tax breaks who were unsatisfied by the outcome of both tax reform and a separate extenders package that became law last month.
“Every group that didn’t get everything they wanted in the last bill is trying to get it in the omnibus,” Marchant, who opposed extending key renewable incentives, said this week. “They just don’t give up.”
For example, last month’s tax deal largely applied only retroactively to 2017 for many energy breaks, meaning they immediately expired once the bill became law (E&E Daily, Feb. 9).
Republicans had mostly punted on dealing with energy in the broader tax reform push last year, in which they used the budget reconciliation process to muscle the bill through the Senate by a simple majority.
However, this time around Republicans will need to secure the support of enough Democrats to attain 60 votes, handing the minority leverage to influence the outcome it was denied before.
Democrats chided Republicans this week for the need to clean up the tax law, which they say was to be expected in the rush to legislate.
“We were told that there was going to be real tax reform and that we were not going to have to do, for example, extenders and the like,” Sen. Ron Wyden (D-Ore.), the ranking member on the Finance Committee, said this week.
“I haven’t seen anything like this reckless haste in all my time in the Congress,” he added. “They were talking about technical fixes and extenders before they actually passed their bill. So I’m not surprised about it, but we’ll see what they have in mind.”
Sen. Ben Cardin (D-Md.), who sits on the Finance Committee, said more favorable treatment for renewables is one option Democrats would like to see included in a technical corrections bill, which he noted is “going to have to be a bipartisan effort.”
“I would think that would be an area we would want to include, because it makes no sense to do another retroactive tax bill when it expires before it gets enacted,” he told E&E News. “So it would be nice to get that done.”
Cardin said Democrats would likely be open to helping fix the tax code “as long as it is a balanced effort that includes priorities that we talked about.”
Sen. John Thune (R-S.D.), who also sits on Finance and had supported two years of extenders, said the prospects for revisiting that debate, including its duration, were unclear.
“That would be great,” he told E&E News on Tuesday, adding that “the House was not at all interested in doing two years of extenders, so I don’t know if that’s changed at all.”
However, Brady’s opposition to extenders is well-known. He said in February he planned to summon affected industries to the committee to make the case why they still need such breaks. That hearing will take place next Wednesday in the Ways and Means Subcommittee on Tax Policy, it was announced this week.
Senate Majority Whip John Cornyn (R-Texas), who similarly has opposed extensions for renewable energy breaks, called it “probably inevitable” that the extenders fight would resurface in the debate over technical corrections.
“Anytime you start talking about reopening the tax debate, I think people are going to look for opportunity to get leverage to do other things,” Cornyn told E&E News yesterday. He said GOP leaders will push to keep any tax package “as narrow” as possible.
Cornyn also suggested there were other ways to win over enough Democrats to get a corrections bill through the Senate.
“I think there’s some strategies to attract some more votes,” he said.
Reporter George Cahlink contributed.