Senate tax bill lures Democrats with sweeteners

by
December 10, 2010

By CARRIE BUDOFF BROWN, Politico

The Senate released its bill Thursday to extend the Bush-era tax cuts for two years, but also renews a host of more minor tax provisions aimed at winning over recalcitrant Democrats in the House and Senate.

The bill, which faces its first key test vote Monday in the Senate, mirrors the deal that President Barack Obama struck earlier this week with Republicans. It extends the tax cuts for all Americans regardless of income, renews jobless benefits for one year and reinstates the estate tax at a level pushed by Republicans.

But in the face of loud resistance from Democrats, congressional leaders and the White House agreed to add some sweeteners, including the continuation of a federal tax break for mass transit users, an ethanol tax credit and a grant program for renewable energy developers.

The bill, which is estimated to cost about $850 billion over 10 years, also renews tax breaks on everything from coal plants, energy-efficient homes, hybrid cars, and mine safety equipment to child care, college and adoption expenses.

The additions could provide some cover for members of the House Democratic caucus, which voted earlier Thursday to oppose the bill, to jump on board with the bill and give the White House the votes it needs to pass the measure.

In the Senate, the energy measures were aimed at winning over Democrats such as Maria Cantwell of Washington, Barbara Boxer of California, Mark Begich of Alaska, and Dianne Feinstein of California. They were among 17 senators who signed a letter Thursday seeking inclusion of the grant program for renewable energy developers.

Democrats also wanted an extension of a clean energy manufacturing tax credit, but the renewable energy grant program was more acceptable to Republicans.

The ethanol credit could attract support from Sen. Tom Harkin (D-Iowa), and it already won praise Thursday night from Sen. Chuck Grassley (R-Iowa), who put out press release touting its inclusion. The ethanol credit, which was set at 45 cents per gallon, was higher than many expected.

Senate Majority Leader Harry Reid (D-Nev.), in a statement Thursday, endorsed the plan for the first time.

“This bill is not perfect, but it provides the economic boost middle-class families and small business in Nevada and across America need,” Reid said. “The time for Republican political games is over. We must pass this measure before Congress adjourns.”

Rep. Chris Van Hollen (D-Md.) said the inclusion of a Treasury Department grant program for renewable energy developers would be well received in his caucus. Eighty-one House Democrats sent a letter to their leaders asking for a two-year extension of the program, implying that they would vote against the deal unless it was renewed.

“That is the most important addition,” Van Hollen said. “A lot of our members wanted it. It was excluded from the original bargain. The fact that it was added is a good thing.”

To read more: http://www.politico.com/news/stories/1210/46220.html#ixzz17iPkGFQi

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