Congress finished a few things on its plate last week as it prepared to leave Washington to begin a two-week recess.
Following House and Senate passage earlier in the week, President Obama March 30 signed into law a 90-day extension of federal highway and transit programs. The legislation (H.R. 4281) also will ensure the continued flow of motor fuel, heavy truck, and truck tire taxes into the Highway Trust Fund through the end of June. Though the Senate had previously passed their $109 billion version of the transit reauthorization bill, the House had been unable to come to a long-term agreement on the highway bill, and so the short-term solution prevents the authorization from expiring March 31.
Despite a strong effort from Senator Robert Menendez (D-NJ), as well as a Rose Garden support speech from President Obama, the Senate failed to limit debate last Thursday on the Repeal Big Oil Tax Subsidies Act (S. 2204). The 51-47 vote fell nine votes short of the 60 needed to invoke cloture and limit debate on legislation that would end $21 billion in tax breaks for oil and gas companies and extend through 2012 a number of expired renewable energy tax credits, including the credit for energy-efficient new and existing homes, the credit for certain plug-in electric vehicles, the credit for energy-efficient appliances, the 1603 Treasury grant program, the cellulosic biofuel producer credit, and the Section 48 investment tax credits for offshore wind facilities.
Senator Menendez’ renewable energy tax extenders bill was not the first, the most recent coming from Senator Debbie Stabenow (D-MI) as an amendment to the Senate version of the highway bill, nor will it be the last. Though it is likely that similar language will be offered to most major pieces of legislation that move in Congress through the summer and fall, it is likely that it may be included as some part of a larger bargain during the lame duck session at the end of the year. When such a debate does take place, one potential trade off scenario could be that sequestration would be postponed for a year, the so-called Bush tax cuts would be extended for a year, and the energy tax credits scheduled to expire at the end of 2012 would be extended for a year, probably with some tweaking. In exchange, some reconciliation would need to be made with respect to spending cuts, potentially resembling a package that the Super Committee discussed but never formally endorsed, including reductions to entitlement programs and Defense Department funding – specifically programs that many agree need reform, but that most prefer not to address, especially during an election year.