Tax News

CCH (cch.taxgroup.com) reports:

  The Senate on July 29 voted again on a motion to proceed to a House-approved tax extenders bill, the Energy and Tax Extenders Bill of 2008 (HR 6049), but the motion did not garner the necessary two-thirds majority and failed 53-43; the previous vote to proceed to the House bill, on June 17, failed as well (TAXDAY, 2008/06/18, C.1). The vote was an attempt to avoid procedural issues by moving first to a House vehicle that could be amended with Senate language --as, by law, tax bills must originate in the House.

  The Senate plans to proceed to the Jobs, Energy, Families, and Disaster Relief Bill of 2008 (Sen 3335) offered by Senate Finance Committee Chairman Max Baucus, D-Mont., on July 30. That bill does not offset the cost of a one-year patch for the alternative minimum tax, an issue that has led many Republicans to vote against the House extenders package, which is fully paid for. The Baucus measure also includes temporary, rather than permanent, offsets for temporary extensions of tax cuts and omits controversial provisions that have drawn objections from Republicans. The Senate can comply with procedural requirements for tax legislation by passing the Baucus bill, and then replacing the text of a House bill with the same language.

  The vote on extenders legislation came about as Senate Democratic and Republican leaders sparred over procedural moves on energy legislation that would curb the practice of oil speculation (Sen 3268). As both parties jockey for voter approval on addressing rising fuel costs, Senate Majority Leader Harry Reid, D-Nev., linked approval of the extenders legislation, which contains approximately $17 billion in renewable energy-related tax breaks, with Republican demands to offer amendments to Sen 3268 allowing oil drilling in U.S. coastal waters. Democrats are adamantly opposed to such action. "This is the third time this year Republicans have said no to creating incentives for innovators to invest in alternative energy sources, which would also create good-paying jobs here at home and begin to break our dependence on oil and move the nation toward clean, affordable and renewable fuels," said Reid following the vote.

  Earlier in the day, Baucus spoke to reporters at a press conference ostensibly promoting renewable energy, but the forum served more as a soapbox to promote his extenders package. "Americans want Congress to steer this country toward alternative and renewable energies," Baucus said. "With gas at $4 a gallon, why on earth would we wait another minute to start boosting the new energy technologies promoted in this tax relief bill?"

  The House measure (HR 6049) would also extend a group of expiring business and family tax provisions and provide a host of tax incentives to increase the production of renewable energy. House Ways and Means Committee Chairman Charles B. Rangel, D-N.Y., had tried to portray his extenders bill, which was approved by the House on May 21, as a significant step toward reducing American dependence on foreign oil, but GOP lawmakers were more intent on adding provisions that would repeal the alternative minimum tax and extend the Bush tax cuts passed in 2001 and 2003. At the time, Rangel criticized the provisions because they were not offset by spending cuts or tax increases, saying they would add to the federal budget deficit.

  By Jeff Carlson, CCH News Staff

SFC Release: Baucus Statement on Sen 3335, the Jobs, Energy, Families, and Disaster Relief Act of 2008

SFC Release: Democratic Senators, Energy Expert Discuss Efforts to Increase Investments in Alternative and Renewable Energy, Conservation