Grassley: Senate will wait on tax extender package due to fiscal cliff talks

Sen. Chuck Grassley (R-Iowa) said the Senate would wait to move on a $205 billion tax extenders package while President Obama and congressional leadership work on a “fiscal cliff” bargain.

That means the immediate fate of a one-year extension for a wind power production credit will remain uncertain. That credit is wrapped into the larger package, though some conservatives want to vote on that provision separately in order to defeat it.

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“I’m more interested in the process going forward right now. I don’t want to impede that process by saying anything that would show that there’s a disagreement that we’ve got to do something about the fiscal cliff,” Grassley said at a Tuesday press conference.

Grassley, who is the architect of the 2.2 cent per kilowatt-hour credit for wind power production, said he would push for its extension.

He said he would not push the extenders package right now because it might distract President Obama and House Speaker John Boehner (R-Ohio) from talks on the fiscal cliff. He said averting those deep automatic spending cuts and income tax increases, set to take effect Jan. 1, takes priority over everything.

Grassley did say, however, that he wants wind energy to play some role in the discussions between Obama and Boehner.

“And when you get back to wind energy, that seems to me to be not the most important thing on the agenda for any of the two people that I have mentioned,” Grassley said. “But it's higher on my agenda and I expect it to be part of the process moving on.”

Boehner struck a conciliatory tone on hammering out a deal when Obama won a second White House term. He said he was open to “new revenues,” such as closing tax loopholes and eliminating deductions, but refused to raise tax rates.

Obama, however, says his reelection showed Americans prefer his tax plan, which would extend tax cuts for families making less than $250,000 per year.

That leaves dozens of tax incentives, including the wind credit, approved in August by the Senate Finance Committee, hanging in the balance.

With Grassley signaling the Senate might idle on that $205 billion package, conservatives will have more time to mount efforts aimed at excising the wind credit.

Fiscal conservatives, such as Sen. Lamar Alexander (R-Tenn.), believe voting on the wind incentive separately would improve chances of killing it. They say it subsidizes an energy source that otherwise would be uncompetitive in energy markets.

But the wind industry, along with the president, many Democrats and several state governors, insists the incentive is a jobs issue.

They cite statistics from trade group the American Wind Energy Association that letting the credit expire would cost 37,000 jobs and billions of dollars of investment. They say uncertainty surrounding the credit's future already has forced firms to lay off workers and has curtailed projects for next year.