Senate panel deadlocks on energy tax credits bill

Senate panel deadlocks on energy tax credits bill
© Greg Nash

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.

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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 WydenRonald (Ron) Lee WydenDemocrats warn shrinking Biden's spending plan could backfire Democrats release data showing increase in 'mega-IRA' accounts Senate Democrats press administration on human rights abuses in Philippines MORE (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.”

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The proposal has some similarities to energy-related provisions in the $2.3 trillion infrastructure plan President BidenJoe BidenThe Supreme Court and blind partisanship ended the illusion of independent agencies Missed debt ceiling deadline kicks off high-stakes fight Senate infrastructure talks spill over into rare Sunday session MORE 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 DainesSteven (Steve) David DainesSenate committee advances bipartisan energy infrastructure bill  Hillicon Valley: Lina Khan faces major FTC test | Amazon calls for her recusal | Warren taps commodities watchdog to probe Google Senators propose bill to help private sector defend against hackers MORE (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.