I have not been blogging on the new tax credit package, since it’s hard to justify getting people’s hopes up over this given how badly the enviros and the Dems messed up on coastal drilling.
But the Senate has passed out a (flawed) tax bill, and now it is in the hands of the House Dems, who have yanked out some of the dirtiest incentives. Here is today E&E Daily piece, which describes the state of play:
House eyes changes today after Senate approves long-stalled credits (09/24/2008)
Ben Geman, E&E Daily senior reporter
The House plans to vote on long-stalled extensions of renewable energy tax credits today following a breakthrough Senate vote yesterday, but Democratic leaders are planning changes to the measure that could slow a final deal.
The Senate yesterday voted 93-2 for a $17 billion energy tax package that extends credits for wind, solar, energy efficiency and other projects. The energy credits are part of a larger tax bill (H.R. 6049) the Senate sent to the House that also extends several business and personal tax breaks, and provides a one-year “patch” for the Alternative Minimum Tax.
Under the Senate bill, the energy credits are fully offset, the other “extenders” are partially paid for, while the AMT fix — which is to prevent the tax from hitting middle-income earners — is not offset.
But the House is planning to split the measure into separate parts, and the energy and non-energy “extenders” will be together as a fully offset bill, according to a Democratic aide, who said the non-energy extenders will be limited to one-year.
“A partially paid-for package of energy and business tax extenders is a no-go in the House,” said Rep. Earl Pomeroy (D-N.D.), a member of the fiscally conservative “Blue Dog” Democrats and the Ways and Means Committee. “If a smaller package is all that can be paid for, then a smaller package is what we’ll pass.”
The AMT patch and disaster relief provisions will move separately under suspension of the rules, the aide said.
House drops fossil fuel incentives
The House version of the energy tax package contains some differences with the Senate plan, including removal of some fossil fuel incentives that environmentalists oppose.
The House plan drops a Senate provision that provides incentives for expansion of refineries to process oil sands and oil shale, and alternative fuel credits that can be applied to coal-based fuels, according a Ways and Means Committee summary.
Senate Majority Leader Harry Reid (D-Nev.) had pleaded with the House to accept the overall Senate tax package, arguing it reflected a hard-fought compromise with Republicans that could collapse if altered.
Renewable and efficiency credits have cleared the House several times but repeatedly fallen victim to partisan conflicts in the Senate during this Congress until yesterday’s vote.
The credits have wide bipartisan support but their renewal has been slowed for months over debates about how — and whether — to offset the costs of tax incentives.
Both chambers provide a one-year extension of the production tax credit, which otherwise would expire at year’s end, for wind projects and longer credits for other renewable sources.
The bills include eight-year extensions of investment tax credits for commercial and residential solar projects, and renew a suite of incentives for efficient homes and buildings, among other provisions.
But Senate Finance Chairman Max Baucus (D-Mont.) expressed confidence the chambers could reach agreement. “The bottom line is this: We are talking about the edges here. We are going to get this all passed. We are talking about background noise, which sometimes is noisy, but it is still background noise. We will get these passed,” Baucus said.
If he is right, the extension of the renewable energy credits will give at least a sigh of relief to the wind industry, which has pressed for long-term extension of its credit but above all wanted to prevent a lapse. Past lapses have led to sharp reductions in the industry’s growth rate.
“Clean energy tax credits are a vital part of the solution to some of America’s most pressing problems,” said Gregory Wetstone, a lobbyist with the American Wind Energy Association, citing jobs that come along with the industry and environmental benefits of renewable power.
The solar industry got a big boost from yesterday’s vote. The Senate plan provides a long-term extension of its credits and removes certain restrictions on the incentive, notably the $2,000 cap for residential solar systems.
The solar industry commissioned a study by a company called Navigant Consulting Inc. that showed that an eight year extension would lead — directly and indirectly — to several hundred thousand new jobs and more than $232 billion in investment between 2009 and 2016.
How this all turns out is anybody’s guess. Needless to say it would be criminal to let the tax credits expire, given that the Democrats ‘control’ Congress.