Overwhelming vote advances extenders bill, but hurdles remain

Source: Nick Juliano, E&E reporter • Posted: Wednesday, May 14, 2014

A popular bill to extend dozens of expired business tax incentives — including several renewable electricity, energy efficiency and alternative fuels credits — cleared a key hurdle in the Senate yesterday even as it remained in danger of faltering amid bitter partisan fights that have nearly ground lawmaking to a halt.

Senators overwhelmingly voted in favor of a procedural measure to formally take up the so-called tax extenders bill, but that 96-3 tally may not shield the legislation from tough hurdles ahead. Senate Majority Leader Harry Reid (D-Nev.) is again expected to block any amendments to the bill, a move sure to further enrage Republicans who say they are routinely shut out of the legislative process.However, Republicans apparently remain undecided on how to proceed. While GOP senators mostly stuck together earlier this week to block an energy bill after Reid blocked amendments to it, Minority Leader Mitch McConnell (R-Ky.) stopped short of guaranteeing that extenders would meet the same fate.”It is always our hope to have amendments, and as to what we’ll do in the future, I can’t tell you right now,” McConnell said during his weekly press conference.

The extenders bill may be the only piece of substantive energy legislation enacted this year, especially following the efficiency bill’s failure Monday. It would reinstate about a dozen tax breaks that have been expired since the beginning of this year. The most significant of those is the production tax credit, which supports wind, geothermal, biomass, waste-to-energy and new hydropower development. The package also includes a $1.01-per-gallon advanced biofuels credit, a similar $1/gal biodiesel credit, a $0.50/gal credit for alternative fuels derived from natural gas or other sources, and credits to promote energy-efficient homes and businesses.

Most of the energy provisions enjoy bipartisan support, although the PTC in particular has become a top target of outside groups linked to the tea party movement and supported by the industrialist Koch brothers. Sen. Mike Lee (R-Utah) earlier this month introduced the latest version of a bill to eliminate the PTC and other clean energy tax credits (Greenwire, May 2). Lee told E&E Daily yesterday that he would offer the bill as an extenders amendment but said he was unsure whether it would get a vote.

During a Finance Committee markup last month, Sen. Patrick Toomey (R-Pa.) offered an amendment to eliminate the energy credits. It failed 6-18, drawing opposition from all the committee’s Democrats plus five Republicans — Sens. Charles Grassley (Iowa), Mike Crapo (Idaho), John Cornyn (Texas), John Thune (S.D.) and Rob Portman (Ohio).

Republicans are still drawing up the list of amendments they will seek votes on, but the energy items are unlikely to be a top priority because they tend to split the caucus, said Thune, a member of leadership who has argued the PTC should be gradually phased out rather than simply remaining expired.

Much more emphasis this week will be placed on health care and other tax issues, with several Republicans yesterday calling for a vote to repeal the tax on medical devices that was implemented as part of the Affordable Care Act. Eliminating the tax enjoys substantial support among Democrats, especially those with device makers located in their states, a dynamic that may increase the pressure on Reid to allow a vote on it.

When Reid blocked amendments to a bipartisan energy efficiency bill, three of its Republican co-sponsors joined the rest of their caucus to block it with a retaliatory filibuster yesterday (E&E Daily, May 13). Failure of the efficiency bill from Sens. Jeanne Shaheen (D-N.H.) and Portman came to be seen as another example of the overwhelming dysfunction that has taken hold of the upper chamber, given that the bill had more than a dozen co-sponsors evenly split between the two parties and that it attracted support from an array of influential groups across the political spectrum, from the U.S. Chamber of Commerce and National Association of Manufacturers to the Natural Resources Defense Council.

The extenders bill enjoys similar levels of support, having been voted out of the Finance Committee on an almost unanimous voice vote last month and enjoying backing from across the business community, where replacing the lapsed tax breaks is seen as more important that the relatively modest suite of efficiency measures contained within Shaheen-Portman. Still, its success is far from guaranteed, given the ongoing partisan showdown over floor procedure. The extenders bill also is attracting resistance from conservative groups such as the Club for Growth, although it is supported by Americans for Tax Reform.

The broad Senate package is encountering stiffer resistance in the House than in years past; last week, the lower chamber moved through a much smaller package to make permanent just a handful of overwhelmingly popular incentives, such as the research and development tax credit (Greenwire, May 9).

Regardless of what happens in the Senate in the coming days, final action to extend the credits is not expected until after the November elections, when extenders legislation is one of the typical orders of business handled in such lame-duck sessions.