Battle Heats Up In Congress Over Tax Extenders Legislation

by Mike Godfrey Tax-News.com, Washington

30 September 2008

The fate of several expiring business and personal tax breaks remains uncertain after the House of Representatives defied the Senate and the Bush administration and passed its own version of the tax extenders legislation.

The legislation, known as the Renewable Energy and Job Creation Tax Act of 2008, would extend tax credits and deductions that expired last year or would expire at the end of this year, supposedly without adding to the national debt. These include the R&D tax credit, active financing provisions, the state and local tax deduction and several incentives for the production of clean energy.

While House Ways and Means Chairman Charles Rangel (D - NY) says that the tax benefits in the bill are virtually identical to provisions included in legislation passed by the Senate last week, the White House has raised objections to certain offset provisions in the House proposals, and President Bush has threatened to veto any legislation that differs from the Senate version.

Rangel however, remains unrepentant, commenting after Friday's House vote that: “We’ve put together a bill that makes a lot of sense on the issues – tax relief for families and businesses, energy independence and creating new, green jobs for our economy."

He added: "The only thing keeping this bill from the President’s desk is politics and I hope we can work together to jump that hurdle and I hope we can jump the hurdles and make this bill law.”

With the current Congress fast drawing to a close as the elections approach, Max Baucus, Chairman of the Senate Finance Committee, has urged the House to come to its senses and approve the Senate legislation before it is too late.

"The White House has indicated that the President will sign the Senate bill and enact the tax incentives and cuts upon passage in the House," he stated on Friday.

"It is time for the House to do what’s fair, and announce that it will vote on the Senate’s tax legislation when they receive it. The Senate bill achieves our common goals to support energy, jobs, and families, and it goes further than the Senate has ever been able to go before toward fiscal responsibility on all these matters. While the House bill cannot pass in the Senate and will assuredly draw a veto, the Senate bill received 93 yes votes and it can become law for all of America’s working families right away,” he added.

“The House is welcome to work its will on its own bill, but we have been through this before. At the end of the day we need new tax law, and the Senate bill is a proven bipartisan solution to get tax cuts for energy, jobs, and families now. The time for turf battles is done," Baucus argued.

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