Senate adds energy tax package to bailout bill

Will the Senate really revive the renewable tax credit package back from its House-induced coma? [And by “House” I mean the House of Representatives, not the brilliant but irascible Dr. Gregory House, who certainly might put a patient into a coma to save him or her — indeed, he himself was put into an induced coma…. But I digress.]

E&E Daily reports:

The Senate has added an extension of expiring renewable energy tax credits and other tax breaks to the Wall Street bailout bill set for a vote tonight….

While the Senate pays for the roughly $17 billion in energy incentives, many other business and personal tax credits now attached to the Wall Street bill are not fully offset in their plan. Nonetheless, Senate supporters of their version of the broad tax bill (H.R. 6049), which passed 93-2, say it would sail through the House if brought up for a vote there.

Here is the rest of the article:

Monday’s defeat of the Wall Street bailout measure meant the House did not adjourn as expected. With pressure on Congress to pass the bailout, senators had a new crack at the tax extenders, which, in turn, may help gain GOP support for the Wall Street bill in the House.Key provisions include a one-year extension of the expiring production tax credit for wind projects and an eight year extension of the expiring investment tax credits for residential and commercial solar projects. The package also contains various incentives for energy efficient buildings, plug-in cars, biofuels, advanced coal projects and other technologies.

While the addition of the tax package could anger Blue Dogs, it may also help win support from members of both parties who are loath to let the popular renewable energy credits lapse and back the other credits as well. It also includes a one-year patch for the Alternative Minimum Tax.

House Speaker Nancy Pelosi (D-Calif.) issued a statement last night reaffirming House Democrats’ interest in passing a bill to shore up the economy but steered clear of commenting specifically on the Senate maneuver.

“The Senate has made a decision about how to proceed and what can pass that body. The Senate will vote tomorrow night and the Congress will work its will,” Pelosi said. “House Democrats remain strongly committed to a comprehensive bill that stabilizes the financial markets, restores confidence, and protects taxpayers, and we hope Congress can agree on legislation in the very near future.”

Senate Majority Leader Harry Reid (D-Nev.), who unveiled the plan with Senate GOP leader Mitch McConnell (R-Ky.), won a unanimous consent agreement to proceed to the vote yesterday.

“Senate Democrats and Republicans believe it is essential that we work quickly on this important legislation to restore confidence to our financial system and strengthen the economy,” Reid said. “We have worked in a bipartisan way to do so, and it is my hope that with the improvements we have made to the administration’s proposal, the Senate will pass this legislation tomorrow and the House of Representatives will follow suit soon thereafter.”

Senate Finance Chairman Max Baucus (D-Mont.), in a statement last night, said addition of the various tax credits makes the bailout bill a win for “Main Street” too. “[A]dding tax relief that creates jobs, supports families, and secures a new energy future for the country makes this bill a lot fairer and a lot better for hard-working, taxpaying Americans,” he said.

The Senate-passed tax package also includes $3.8 billion for rural counties hurt by the decline in timber sales on federal lands. It would reauthorize the Secure Rural Schools and Community Self-Determination Act for four years, phasing down payments each year, and readjust its funding distribution formula. It also includes one year for the Payments In Lieu of Taxes program.

Enviro groups want fossil fuel language out of tax bill

The decision to graft the Senate tax package to the Wall Street bailout creates an uphill battle for environmental groups to remove fossil fuel provisions from the measure.

Several groups yesterday renewed their push to omit Senate provisions that support oil shale and coal-to-liquids fuels.

In the activists’ crosshairs are tax incentives for refinery projects that process oil shale and oil sands; an extension of alternative fuel credits that apply to coal-to-liquids; and credits for coal gasification projects that can be applied to coal-to-liquids plants.

“The high carbon liquid fuel provisions in the Senate bill would be a major setback in efforts to solve global warming,” states a letter from Earthjustice, Environmental Defense Fund, Friends of the Earth, Greenpeace, Natural Resources Defense Council, National Wildlife Federation and Public Citizen to House members yesterday.

“Supporting these fuels through tax incentives is completely at odds with mandatory carbon reductions that we expect Congress will enact in the near future,” the letter adds. It also says extension of the renewable energy and efficiency credits are needed to “avoid a major contraction in the clean energy industries.”

The House-passed version of the energy tax bill does not contain the same supports for oil shale, oil sands and coal-to-liquids.

You can read the enviro letter here.

I don’t like the high-carbon fuel provisions either, but I’d be much more sympathetic to the enviro position if they hadn’t been a major reason why we didn’t get an infinitely better bill with some restrictions on drilling (see “The environmental community has had its head in the sand when it comes to reality”).

6 Responses to Senate adds energy tax package to bailout bill

  1. Earl Killian says:

    This is OT, but these comments on the bailout bill were a surprise to me. I wonder if it’s true?

  2. Russ says:

    Earl, I must confess I don’t see what’s surprising about a word of that. It’s obvious in the text of the bill that things like executive pay limitations, prices the taxpayers will pay for this toxic waste, under what conditions the taxpayers will receive equity, are deliberately left in such a convoluted boilerplate so as to allow the Treasury dictator absolute carte blanche.

    As for their planning to sit on the power for awhile, after Paulson yelled “STAMPEDE!” – Aren’t you used to that from this administration by now? The patriot act, the assault on civil liberties, habeas corpus, the “War on Terror”, Iraq….it’s always the same: intentionally or negligently generate the crisis, and/or fraudulently drum up the sense of crisis, the breathlessly shout “We have to act now! There’s no time to think! Only I know how to save us, but you have to do exactly as I say!”

    It’s once again disaster capitalism in action. What we’re going through right now is its biggest play.

  3. Earl Killian says:

    Russ, you’re right, I shouldn’t have been surprised. i just figured that the Democrats would have only added fig leaves to the Paulson plan. Silly me.

  4. It is good news indeed, isn’t it?

    Crossing my fingers for tonite!
    Baucus hinted at this when he said, phooey on the House for snubbing our miraculous cloture-bustin, veto-proofed bill energy bill, ‘times have changed’ with the failure of your bailout vote!

    Heh. Heh heh.

  5. paulm says:

    Stock markets not the only thing crashing…ice sheets next…