Domestic Taxes

House GOP to Senate: Act on tax breaks

The quicker the Senate moves on extending popular tax breaks the better, GOP tax writers in the House say.

Ways and Means Committee Chairman Dave Camp (R-Mich.) and his allies are pushing to revive and make permanent some of the dozens of incentives that expired at the end of last year, like the credit for business research. 

GOP tax writers are hesitant to weigh in on the broader fight over amendments and floor procedure that is stalling the Senate legislation to restore the more than 50 tax breaks commonly known as extenders.

{mosads}But they do believe that quick action in the Senate opens up the chance for a conference committee before November’s election, increasing their odds of permanent extensions.

“I’m not going to get into the specifics about their process,” said Rep. Patrick Tiberi (R-Ohio), the chairman of a Ways and Means subcommittee that deals with taxes.

“But I would like to see the Senate pass the extenders bill — whatever it might be — so we can go to conference and get the real work done.”

The problem for Republicans like Tiberi is that Senate Democrats say they have little interest in allowing a conference committee, even if their chamber does pass their extenders package.

Still, the Ways and Means panel is getting ready to press ahead with their efforts to permanently restore some expired provisions.

Lawmakers and lobbyists say the committee is scheduled on Thursday to consider extensions of several charitable provisions and an incentive, called bonus depreciation, that allows businesses to more quickly write off investments.

The House has already passed a permanent extension of the research credit, albeit over the objections of roughly two-thirds of House Democrats who complained about the $156 billion price tag. 

The Ways and Means Committee has also passed a permanent extension of a tax break for small business expensing and incentives for offshore corporate income. The preference for business expensing, commonly known as Section 179, could hit the House floor as soon as June, aides say.

Camp, who has announced he won’t seek reelection this year, has said that permanent extensions of the preferences would make the tax reform math easier for future tax-writing chairmen.

He’s also said it’s foolish for the U.S. to repeatedly keep important tax breaks afloat on a start-and-stop basis.

But Camp’s allies also acknowledge they face an uphill battle getting Democratic leaders like Senate Majority Leader Harry Reid (D-Nev.) to agree to a conference committee.

“I’m not optimistic Reid’s going to allow anything,” said Rep. Charles Boustany Jr. (La.), a senior committee member.

“But we, I think, will just keep putting pressure on the Senate by passing what we’re doing, with the idea of trying to build as much negotiating leverage as we can to make some of these permanent.”

Still, GOP tax writers also admit that the longer the debate continues, the tougher time they’ll have fighting for permanent extensions of the tax breaks.

If the debate spills into November and December, Republicans acknowledge it would be easier for leaders in both parties just to sign off on the short-term extensions in the Senate bill.

“If it goes into lame duck, then leadership ends up playing a role, and there’s a bigger package of things going on,” Boustany said.

At the same time, Camp will likely have even less leverage after the election, as he’ll have just weeks left in his congressional career.

Lawmakers and lobbyists have said they expect a final resolution on the tax breaks to materialize in the post-election lame duck session, even though they also gripe that leaving those incentives hanging for months and months is terrible policy.

A Senate Democratic leadership aide confirmed that party leaders would have little interest in a conference committee. That’s in large part because, despite the fight over floor procedure, the roughly $84 billion tax cut legislation has broad support from senators in both parties.

The aide added that Democrats would rather push the House to enact their tax breaks legislation should it pass the Senate.

Finance Committee Chairman Ron Wyden (D-Ore.) and Sen. Orrin Hatch (Utah), the committee’s top Republican, are negotiating over potential amendments for the tax breaks package, with the hopes of bringing it back to the Senate floor soon.

But the legislation still faces plenty of obstacles, not least the continued fight over President Obama’s healthcare law.

Republicans are still pressing for a vote to repeal ObamaCare’s medical device tax, and Reid and other top Democrats have warned they wouldn’t allow any such consideration.

Rep. Sandy Levin (Mich.), the top Democrat on the Ways and Means panel, said he expected that Senate action on the tax breaks would put pressure on the House to bend.

“I’m not at all sure what the Republican strategy is,” Levin said, adding that passing the tax breaks quickly would give businesses the certainty that both Republicans and Democrats favor.

“It really should not be left to the lame duck,” Levin said.

Tags Charles Boustany Harry Reid Orrin Hatch Ron Wyden
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