Finance

Senate panel deadlocks on energy tax credits bill

The Senate Finance Committee late Wednesday deadlocked on legislation that would overhaul energy tax breaks in an effort to address climate change.

The panel voted 14-14 along party lines. Democratic leaders have the authority to advance the legislation to the floor, though there is no guarantee there will be a floor vote.

The committee vote comes as lawmakers and the Biden administration seek to pursue infrastructure legislation in the coming months.

There are already a number of different energy tax incentives on the books, many of which pertain to specific types of technologies and have varying expiration dates.

The bill voted on by the committee would create tax credits for clean energy production and investment and clean fuel production that are neutral between technologies. It also would expand the electric vehicle tax credit and reform incentives for energy-efficient homes and commercial buildings. Additionally, the bill would repeal existing tax preferences for fossil fuel companies.

The Joint Committee on Taxation estimates that the measure would reduce federal revenue by about $259 billion over 10 years.

The bill is a priority of Senate Finance Committee Chairman Ron Wyden (D-Ore.), who has introduced different versions of the legislation for a number of years.

“It replaces the old rules with a free-market, technology-neutral system in which reducing carbon emissions becomes the lodestar of America’s energy future,” Wyden said Wednesday as the committee considered the bill. “It can spark a wave of carbon-cutting, job-creating ingenuity across the country.”

The proposal has some similarities to energy-related provisions in the $2.3 trillion infrastructure plan President Biden released in late March. Biden’s proposal calls for expanding and extending tax credits for clean energy and eliminating tax preferences for fossil fuels.

“As we move forward with President Biden’s jobs and infrastructure agenda, our bill should be the linchpin of our efforts on clean energy,” Wyden said in a statement after the committee vote.

Republicans have expressed interest in working on energy-tax issues on a bipartisan basis, but expressed concerns about the provisions to repeal tax incentives for fossil fuel companies. They argued that the bill would cost the U.S. jobs and would lead to higher gas prices.

“This is a very partisan, far-left bill that is going to kill jobs, it’s going to cause energy prices to dramatically increase, and it’s going to make it more difficult for American families and small businesses to prosper,” said Sen. Steve Daines (R-Mont.).

Wyden said fossil fuel companies would still be able to use tax preferences generally available to businesses, and only industry-specific benefits would be replaced.

Tags clean energy Climate change Fossil fuels gas prices Joe Biden Ron Wyden Steve Daines tax incentives

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