Forty-one Senate Republicans wrote today to Senate Finance Chairman Max Baucus, urging that he refrain from proposing offsets to pay for the $100 billion-plus cost of tax bill he intends to mark up in the coming weeks. The measure would extend the research and development credit, renewable energy incentives and other tax incentives, as well as prevent the alternative minimum tax from impacting more taxpayers next year. "Many of these tax relief provisions have already expired and uncertainty about whether and when these provisions will be extended is causing hardship to families and businesses, which is exacerbating current economic difficulties," wrote the GOP senators. "An overwhelming majority of the Senate has already voted this year to extend various expiring energy tax incentives without offsetting tax increases; we believe this same policy should be applied to the other expiring tax incentives and to the AMT patch."
The letter was signed by the entire GOP Senate leadership team as well as Senate Finance ranking member Charles Grassley. The only four Senate Republicans who did not sign were Sens. Olympia Snowe and Susan Collins, both of Maine; George Voinovich of Ohio; and Norm Coleman of Minnesota. Baucus and Grassley introduced the huge tax bill two weeks ago, without offsets. Baucus has said he intends to propose offsets for the package to comply with pay/go rules when he brings it before the committee for a vote, but has not revealed his exact plans. The main reason for waiting to unveil offsets has been the uncertainty over how to pay for aspects of the farm bill, on which a final deal could be struck this week, as well as other legislation that could be signed into law before the tax-extenders measure. Business lobbyists are nervously eyeing the situation. When asked last week about offsets for his larger tax bill, Baucus replied: "Never divulge your offsets. That's rule number one around here." Baucus "believes that Congress should be as fiscally responsible as possible when enacting tax policy or any other policy," an aide to the chairman said today, noting that he has found "pragmatic solutions" to moving legislation in the pay/go environment. "Sen. Baucus always works with and listens to his colleagues on both sides of the aisle. He still intends to bring a number of responsible offsets to the Senate Finance Committee for consideration when the AMT and tax relief extensions bill comes to markup."
This article appears in the May 3, 2008 edition of National Journal Daily PM Update.