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Congress Moves Toward Deal on Spending, U.S. Tax Break Extension

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(Bloomberg) — Congressional negotiators are pushing toward a deal to make permanent a series of expired tax breaks for businesses and individuals, a step lawmakers hope would speed parallel talks on a must-pass $1.1 trillion government spending bill.
House Appropriations Chairman Hal Rogers filed a stopgap bill Wednesday to finance the government through Dec. 16 and avert a shutdown. “It is my hope and expectation that a final, year-long bill will be enacted before this new deadline,” the Kentucky Republican said in a statement. Current funding runs out after Friday.
Congress is simultaneously negotiating two fiscal measures — one that would fund the government through September 2016 and the other that would extend several dozen expired tax breaks that need to be renewed before the year’s end. The bills aren’t connected in any substantive way except that lawmakers are now using horse-trading on the tax extender bill help reach a compromise on the spending measure.
“I think an extender deal would be a real help,” Republican Representative Tom Cole of Oklahoma, said Wednesday in Washington.
With the 2016 election nearing, Republicans hope to avoid a repeat of the 16-day government shutdown in 2013 that cratered their standing in public opinion polls.
On the tax extensions, Republicans are pushing to make a number of business incentives permanent. Those include the business research and development tax credit, a deduction for small-business expenses, and another that allows small businesses take a larger depreciation allowance for an asset’s value during the first year after purchase, said second-ranking Senate Republican John Cornyn of Texas and Representative Steve Stivers, an Ohio Republican.
Democrats are seeking permanent extension of the expansions to the Child Tax Credit, the Earned Income Tax Credit and the college-tuition tax credit, which are set to expire at end of 2017. The tuition tax credit provides up to $2,500 per student for people with adjusted gross incomes of up to $80,000 for individuals and $160,000 for families.
Short-Term Extensions
Among other tax breaks awaiting renewal is a sales tax deduction that’s popular in Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming because those states don’t tax income.
“We continue to narrow the differences” on the tax breaks, said House Ways and Means Committee Chairman Kevin Brady of Texas. “We’re very hopeful we’ll be able to do a permanent package.”
If the discussions start “ to go apart,” Brady said he would seek to bring up a bill he filed Monday that would simply extend the tax breaks through 2016.
Earlier Wednesday, Rogers said dozens of policy disputes, including whether to lift the U.S. crude-oil export ban, were holding up agreement on the $1.1 trillion spending bill. The tax extension bill and spending measure may wind up being combined, he said.
“I hope for a breakthrough that would propel us toward a bill soon” to finance the government, said Rogers, a Kentucky Republican. “It’s unlikely.”
 EPA Rule
Rogers said leaders were debating whether to repeal an Environmental Protection Agency rule that seeks to protect water quality by expanding the activities subject to federal regulation, such as spreading fertilizer.
Some Democrats want at least a 10-year extension of wind and solar tax breaks in exchange for lifting the ban on U.S. crude oil exports as part of spending bill, Senator Ed Markey, a Massachusetts Democrat, said Wednesday. Democrats think those tax breaks should be “tied in terms of size and scope” to any benefits oil companies receive from lifting the ban, he said.
Senator John Hoeven, a North Dakota Republican who supports lifting the oil export ban, said most of the work on that issue is being handled by party leaders.
“I’m optimistic but nothing’s final until everything’s final,” Hoeven said. “I think we’ve got a good opportunity to get it and we just need to keep pushing it on the merits.”
Also at issue is whether the spending bill will include a Republican proposal, opposed by Democrats, to block Syrian refugee resettlement in the U.S., as well as a plan backed by both parties to curb a visa waiver program that eases travel to the U.S. Both questions have become priorities for many in Congress following terrorist attacks that killed 130 people in Paris and 14 in San Bernardino, California.
–With assistance from Roxana Tiron and Erik Wasson.
To contact the reporters on this story: Billy House in Washington at bhouse5@bloomberg.net; James Rowley in Washington at jarowley@bloomberg.net; Kathleen Miller in Washington at kmiller01@bloomberg.net To contact the editors responsible for this story: Craig Gordon at cgordon39@bloomberg.net Laurie Asseo, Michael Shepard

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Men of Value Contributor

Men of Value Contributor

Articles by various contributors to Men of Value, an online magazine for American men who value our Judeo-Christian values of faith, family, and freedom.

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