Baucus promises quick action on tax extenders next year
Senate Finance Chairman Max Baucus (D-Mont.) said he has been working to build support for extending renewable energy tax incentives that expire at the end of 2012.
“We’re going to keep fighting to extend other expiring tax cuts for families and small businesses … when Congress reconvenes,” he said in a statement this weekend. “As we work together on comprehensive tax reform for the long-term, reaching a permanent agreement on expiring tax cuts right away must be our top priority.”
At issue are the expiring 30 percent investment tax credit for manufacturing equipment and the 2.2-cent-per-kilowatt-hour production tax credit.
The renewable energy industry has lobbied hard for months to convince Congress to extend those credits and another incentive that will expire at the end of this year, the Treasury Department’s so-called Section 1603 grant-in-lieu-of-tax-credit program. That program, which was originally created in the 2009 stimulus law and extended for one year last December, will not likely be renewed.
But broad support exists to continue the other credits.
A group of Senate Democrats has been meeting weekly to discuss possible Senate pathways forward on energy legislation — including tax extenders (E&ENews PM, Dec. 6). And Reps. Earl Blumenauer (D-Ore.) and Dave Reichert (R-Wash.) have floated legislation in the House that would extend the production tax credit through 2016.
Sen. Orrin Hatch (R-Utah), ranking member on the Finance Committee, said he too wanted to see an extension of at least some of the tax credits, although he stopped short of promising action on the renewable energy incentives.
“I would like to do an extenders bill,” he told reporters last week. “I wish we could make the R&D tax credit permanent,” he added, referencing the popular research and development tax credit, which is enjoyed by a variety of industries.
The renewable energy industry says timely extension of the tax credits is crucial to keeping investments coming and businesses running
“The clock is ticking, business decisions are being made and some damage is certain,” American Wind Energy Association CEO Denise Bode said in a statement this weekend. “Tens of thousands of wind energy manufacturing jobs can still be saved if Congress addresses extenders early in 2012.
But not everyone thinks extending the credits would be a good idea.
“Subsidizing uneconomical industries, as perhaps the wind-energy tax credit has done for two decades, shifts labor and capital away from other sectors of the economy,” wrote Nicolas Loris, a policy analyst at the Heritage Foundation, in a recent blog post. “Removing the subsidy would free up these resources to be more productive elsewhere in the U.S. economy.”