The Senate today failed to invoke cloture, 50-44, on a nearly $120 billion tax bill extending a host of expiring provisions like the research and development credit and boosting incentives for wind, solar, biodiesel, clean-coal and other projects to help spur alternative energy development. The bill would provide a one-year patch for the alternative minimum tax as well. While that provision was not offset, the rest of the bill would be largely paid for by scaling back two tax breaks deemed relatively non-controversial by many in the business community. "This vote is about jobs, energy and paying America's bills," said Senate Finance Chairman Max Baucus. But Republicans opposed paying for extensions of current-law tax policies. "Once again, our Democrat friends never miss an opportunity to sock Americans with a new tax hike," said Senate Minority Leader McConnell. They also objected to other provisions in the bill, including a $1.6 billion tax break for trial lawyers and application of Davis-Bacon prevailing wage requirements to new bond financing for construction of renewable energy facilities.
The measure is in limbo, although Senate Majority Leader Reid can call the bill back up for a vote. Aiding the GOP cause were Democratic absences, including Senate Appropriations Chairman Robert Byrd and Sen. Hillary Rodham Clinton of New York. Those two may be back for votes soon, however, giving Democrats a better chance on a revote as well as giving affected industries more time to lobby. Speaking earlier today at the U.S. Chamber of Commerce, Baucus said he thought cloture could be invoked within a week to 10 days. One lobbyist predicted Republicans would eventually back the bill or risk blame for expiration of the tax breaks, particularly vulnerable incumbents like GOP Sens. John Sununu of New Hampshire and Norm Coleman of Minnesota.
Baucus included provisions such as a 10-year extension of the Wool Trust Fund, at a $261 million cost. That program redirects duties on imported wool fabrics toward promotion of U.S.-made wool, important to the sheep industry in Baucus' home state of Montana. There is a $3.3 billion extension of rural county payments and payments-in-lieu-of taxes for Western states largely made up of federal land, as well as a $2 million excise tax exemption for wooden arrow manufacturers. Those provisions were sought by Sen. Gordon Smith, R-Ore., who is up for re-election and who voted for cloture. Baucus also included a $223 million provision allowing commercial fishermen impacted by the 1989 Exxon Valdez oil spill to spread out their tax liability for any settlements they received in conjunction with the accident. That language was sought by Alaska GOP Sens. Lisa Murkowski and Ted Stevens. Stevens is up for re-election. Both, however, voted against cloture.
Other than Smith, Republicans voting for cloture included Sens. Olympia Snowe of Maine and Bob Corker of Tennessee. Corker said while "this bill isn't perfect," he backed the extension of the state sales tax deduction and renewable energy incentives, as well as closing tax loopholes for hedge fund managers. "I am pleased that an intellectually honest attempt has been made to bring a fiscally responsible tax bill to the floor of the Senate for debate. That doesn't happen very often around here," Corker said in a statement.
This article appears in the June 14, 2008 edition of National Journal Daily PM Update.