Senate Tax Extenders Nightmare
With little debate and no opportunity for amendments, the “world’s greatest deliberative body” this week rushed a package of tax breaks through the Senate Finance Committee. The bill, called a tax extenders package, is an affront to the American taxpayer. Only Senators Toomey (R-PA), Coats (R-IN), and Enzi (R-WY) opposed the package. They should be commended for their bold leadership, especially in light of the failure of so many of their colleagues.
In an unfortunate sign of business as usual in Washington, the energy section is loaded with special interest giveaways to large corporations. Here is a list of the most objectionable energy related giveaways:
- Two year extension of credits to facilities producing energy from certain renewable resources including the Wind Production Tax Credit ($10.49 billion)
- Two year extension of biodiesel and renewable diesel credits ($2.56 billion)
- Two year extension of credit for nonbusiness energy property ($1.387 billion)
- Two year extension of excise tax credits and payment provisions for alternative fuels ($918 million)
- Three year extension of credits for energy-efficient new homes ($760 million)
- Two year extension of energy efficient commercial buildings deduction ($315 million)
- Two year extension of credits for alternative fuel vehicle refueling property ($112 million)
- Two year extension of second generation biofuel producer credits ($45 million)
- Two year extension of credits for fuel cell vehicles ($6 million)
- One year extension of credits for electric motorcycles ($4 million)
- Three year extension of special allowance for second generation biofuel plant property ($2 million)
These provisions alone will cost the American taxpayer an estimated $16.5 billion over the next ten years, which is 17.33% of the entire tax package. More importantly, these tax subsidies will benefit a narrow set of special interests at the expense of the average American.
The biggest chunk of this energy section ($10.49 billion or 11% of the entire package) includes the wind Production Tax Credit (PTC). The PTC is an important component of President Obama’s carbon regulations for existing power plants, which would effectively lead to a federal takeover of the electricity system. While President Obama occupies the White House, it has proved difficult for the Republican-led Congress to pass meaningful legislation to stop his regulatory agenda. Ending the wind PTC is one way that Congress can fight back.
The good news is that since the PTC is currently expired, Congress can strike an important blow against the implementation of the Obama administration’s carbon regulations by simply doing nothing. Disappointingly, instead of working to stop the president’s carbon agenda, the Senate Finance Committee just advanced it. Their vote for the PTC was essentially a vote for the President’s carbon regulations, which each Republican on the committee has expressed opposition to in the past. Because–as even the White House acknowledges–the PTC is critical to implementing the President’s agenda, the American Energy Alliance will key vote against this tax extenders package if it reaches the Senate floor.
The Senate Finance Committee’s abject failure stands in stark contrast to the leadership on display from a number of their colleagues in the previous week. Senators Flake, Manchin, Alexander, McCain, Capito, Lee, Risch, and Lankford wrote to Chairman Hatch and Ranking Member Wyden asking them to “refrain from resuscitating the expired wind production tax credit (PTC) or modifying the planned phase out of the renewable energy investment tax credit (ITC) in 2016.” The American Energy Alliance applauds these Senators for fighting to protect their constituents from the harmful effects of these subsidies. We especially applaud Senators Toomey, Enzi, and Coats for standing up for the taxpayers in their states by voting against the bill in committee.