House backs conference talks in nail-biter vote

Source: Geof Koss, E&E News reporter • Posted: Tuesday, December 5, 2017

The House last night voted to go to conference with the Senate on tax reform but only after overcoming internal GOP divisions over spending that nearly sank formal negotiations.

The chamber voted 222-192 to launch formal conference talks after leaders kept the 15-minute vote open for more than a half-hour to convince Freedom Caucus members not to scuttle the motion.

The several-dozen-strong caucus of rabble-rousers had expressed concern that funding the government until three days before Christmas would diminish their leverage in spending talks.

Freedom Caucus Chairman Mark Meadows (R-N.C.) told reporters he had won a commitment from GOP leaders to consider extending the current continuing resolution to Dec. 30, instead of Dec. 22.

While the short-lived protest was not over the substance of the tax bill, it nonetheless highlighted the clout of Freedom Caucus members, who could be seen in animated discussions with GOP leaders during the vote.

“This could be a long few days if they can’t agree on a motion to go to conference,” said Rep. Richard Neal (D-Mass.), the ranking member on the Ways and Means Committee.

The GOP conferees named by Speaker Paul Ryan (R-Wis.) include Ways and Means Chairman Kevin Brady (R-Texas) and members Devin Nunes (R-Calif.), Peter Roskam (R-Ill.), Kristi Noem (R-S.D.) and Diane Black (R-Tenn.), who also leads the Budget Committee.

Natural Resources Chairman Rob Bishop (R-Utah), Rep. Don Young (R-Alaska), Energy and Commerce Chairman Greg Walden (R-Ore.) and Rep. John Shimkus (R-Ill.) were also named to the conference to address non-tax matters, including the Senate’s provisions to open the Arctic National Wildlife Refuge.

Minority Leader Nancy Pelosi (D-Calif.) named Neal, Rep. Sander Levin (D-Mich.) and Rep. Lloyd Doggett (D-Texas) as conferees from the Ways and Means Committee, along with Natural Resources Committee ranking member Raúl Grijalva (D-Ariz.) and Energy and Commerce Committee member Kathy Castor (D-Fla.).

The Senate is expected to name its conferees later this week.


Even ahead of the talks, Republicans have been busy trying to sort out issues in the competing House and Senate bills that have drawn fire from business groups and energy companies.

The Senate’s surprise decision to maintain the corporate alternative minimum tax (AMT), which was harshly criticized by Murray Energy Corp. CEO Robert Murray as a threat to coal firms, is one such flashpoint (E&E Daily, Dec. 4).

Companies fear that maintaining the corporate AMT at 20 percent while lowering the corporate rate to the same level will force companies into the AMT, forgoing tax breaks such as the research and development tax credit.

“That has to be eliminated because that would destroy R&D,” House Majority Leader Kevin McCarthy (R-Calif.) said yesterday on CNBC.

Senate Republican Conference Chairman John Thune of South Dakota said yesterday that staff is reviewing what he called “all the different interactions and feedback effects of what we’ve done.”

“We’re trying to sort out at the Finance Committee level how we resolve that question going into the conference and just how broad those impacts really are,” he told reporters.

Another controversy is the Senate bill’s base erosion anti-abuse tax (BEAT) provisions, which renewable interests say will inadvertently stifle foreign investments in U.S. energy projects by subjecting them to a 100 percent tax.

“Congress just sent a signal to the rest of the world not to invest in America’s solar and wind industries — jeopardizing an industry adding jobs 12 times faster than the rest of the economy,” Environmental Entrepreneurs Executive Director Bob Keefe said in a statement after the Senate passed its bill.

“Despite claims of wanting to promote US economic growth, leaders in Washington just did the opposite,” he said.

Late efforts by Senate Republicans to fix the BEAT provisions failed, although Thune said he hoped it could be addressed in conference.

“That was sort of one of those unintended consequences or effects that we hopefully will be able to remedy, but I’m not sure,” he said yesterday.

Koch-linked lobbying

Efforts to fix the issue will draw opposition from the Koch-linked think tank American Energy Alliance, which on Friday released a letter it had sent to Senate Majority Leader Mitch McConnell (R-Ky.) opposing a “carve-out” for wind and solar.

“Businesses within the wind and solar industries in no way merit preferential consideration,” AEA President Tom Pyle wrote.

Other groups of the Koch brothers’ political network are also working to shape the final tax bill.

Americans for Prosperity joined with the Freedom Partners Chamber of Commerce and other like-minded conservative groups yesterday to urge conferees to “reduce corporate welfare that riddles the tax code.”

While the letter does not single out specific “carve-outs, loopholes and deductions” for elimination, free-market conservative groups have long opposed the renewable production tax credit.

Freedom Partners yesterday also urged Congress to reject a push by nuclear and coal interests to add to a separate tax extenders bill with nearly $70 billion in new tax credits to help struggling power plants (Greenwire, Dec. 4).

In a statement, Freedom Partners Executive Vice President Nathan Nascimento said lawmakers should “eliminate as much corporate welfare as possible, whether that’s handouts to green energy companies or special tax breaks for nuclear energy or fossil fuels.”

The nuclear provision, championed by Exelon Corp., would mirror the investment tax credit for solar projects in providing a 30 percent investment tax credit worth up to $1.2 billion annually over the next four years.

A separate proposal being pushed by the American Coalition for Clean Coal Electricity and several coal firms would allow existing plant operators that meet mercury and other clean air requirements to recoup half of their fixed operation and maintenance expenses up to a limit of $26 per kilowatt of installed capacity. That credit could total up to $6.5 billion annually for 10 years.

Republican members of the bipartisan Climate Solutions Caucus are also facing pressure from the left to oppose the ANWR provisions in the Senate’s tax bill (E&E News PM, Dec. 4).