Senate Finance Chairman Max Baucus and ranking member Charles Grassley introduced a $100 billion-plus bill today to extend tax breaks that have expired or will expire this year, including an increase in the alternative minimum tax exemption for 2008 and a two-year extension of the research and development credit. The measure also extends a series of renewable energy incentives set to expire this year, the state sales tax deduction and a qualified tuition deduction, among others. “America needs Congress to act on a host of tax provisions that mean real dollars and cents in their pockets,” Baucus said in a statement. The measure bundles together the always contentious AMT patch with all of the other expiring provisions, including a package of military tax breaks.
The measure was still being scored at presstime, but the AMT fix comes at a $60 billion cost, making it by far the single biggest item in the bill. No parts of the bill would be offset, as Finance Committee members continue to discuss how to comply with pay/go rules. House Democrats have been insistent on finding offsets, but Baucus has pointed out repeatedly that 60 votes do not exist in the Senate, at least for the AMT portion. Last year Congress passed a one-year AMT fix without offsets over the objections of House Democrats, but the extenders bill died as the Senate could not agree on offsets. The R&D tax credit is particularly important to businesses, and Sen. Orrin Hatch, R-Utah, a Finance Committee member, said today the pay/go issue could be an obstacle. “We need your help on this,” he told the National Association of Manufacturers. “Don’t let the offset problem or the pay/go problem stop this [effort] this year. We’ve got to get it through.”
This article appears in the April 19, 2008 edition of National Journal Daily PM Update.