Energy Policy:ENERGY POLICY: Democrats eye budget bills for energy tax plans (02/26/2008)
Ben Geman, E&ENews PM senior reporter
Senate Democrats are eyeing a filibuster-proof budget bill as a vehicle for energy tax provisions that have narrowly failed to win the 60 votes needed to cut off debate, several lawmakers said today.
Energy taxes are a "candidate to be considered in [budget] reconciliation," Budget Chairman Kent Conrad (D-N.D.) told reporters today. "I think we have to look at things that reduce our dependence on energy."
Conrad did not provide details on what specific energy tax provisions might be considered and emphasized that no decisions have been made about using the budget process.
Other Democrats also confirmed the idea is in play. "It is possible, very possible," said Finance Chairman Max Baucus (D-Mont.).
The House will vote as soon as tomorrow on a roughly $18 billion plan to extend and create new alternative energy tax breaks and offset the costs by repealing tax incentives for major oil companies. The bill is similar to measures the House approved last year and is expected to pass again.
But this basic formula -- expanding renewable incentives and paying for it with higher revenue from oil producers -- fell just shy of the 60 votes needed in the Senate for cloture last year amid GOP-led filibusters and a White House veto threat.
Under Senate rules, however, budget resolution and reconciliation bills cannot be filibustered. The congressional budget resolution may give committees "reconciliation" instructions, whereby the committees make policy changes to meet the spending and revenue goals of the budget plans.
The then-GOP majority came very close to opening the coastal plain of the Arctic National Wildlife Refuge to oil drilling through the budget reconciliation process in 2005. But the effort collapsed in the House when moderate GOP members joined Democrats in opposition of the measure.
Conrad said that candidates for budget reconciliation include energy taxes as well as infrastructure spending and low-income heating aid. He said to be included, plans should be offset, help stimulate the economy and provide savings.
The Budget Committee plans to mark up the resolution next week and have the bill on the floor the following week, Conrad said. But if there are instructions to committees in the resolution, the actual reconciliation process would take place at a later date.
Elsewhere, Sen. Jim DeMint (R-S.C.) today said he plans to offer an amendment to the budget resolution that would require a yearlong moratorium on congressional earmarks.
White House threatens to veto House energy tax bill
The White House today threatened to veto the House energy bill, a stance that was widely expected because of veto threats last year when Congress considered similar energy tax plans.
The Statement of Administration Policy cites opposition to the oil tax provisions. A major revenue-raiser in the bill would strip the section 199 deduction on domestically made goods for major integrated oil companies and freeze it at 6 percent for other oil companies.
Repealing the deduction would raise an estimated $13.6 billion over a decade, according to the House Ways and Means Committee.
"The administration strongly opposes the bill's repeal of the manufacturing deduction for a segment of a single industry," the White House said. "This targeted tax increase would reduce the nation's energy security rather than improve it." The veto threat also singles out other provisions, including changes to the tax treatment of companies' income from foreign oil and gas projects.
Governors press to extend expiring tax breaks
The House bill would extend for several years the availability of tax credits for wind, solar and other renewable projects that are currently set to expire at year's end.
The House bill also includes tax credits for energy efficient homes, buildings and appliance manufacturing. Extending these incentives got a boost from the nation's governors today when the National Governors Association sent a letter to the leaders of the House and Senate tax writing committees.
"Continued and consistent support for renewable energy and efficiency through tax incentives are critical to the development and deployment of alternative energy technologies and energy efficiency programs," the letter states.