Blame game follows collapse of Senate tax talks

Source: Geof Koss, E&E reporter • Posted: Wednesday, April 13, 2016

Efforts to extend a key renewable tax break for a suite of eligible power sources in the Federal Aviation Administration reauthorization bill (H.R. 636) crashed and burned Tuesday afternoon, with the two political parties blaming each other for the breakdown.

“They pulled the tax part,” Senate Finance Chairman Orrin Hatch (R-Utah) told reporters after the weekly policy lunch today, adding that he didn’t know why. “Don’t ask me. I don’t know. I’ve kind of stayed out of it, between you and me.”

Senate Commerce, Science and Transportation Chairman John Thune (R-S.D.) said the much-anticipated finance title will only address what’s needed to fund the FAA, despite a frenzy of lobbying in recent weeks to see energy tax credits and other incentives included.

“I think this was just an acknowledgment that this wasn’t the time or the place to do it and that we’re going to try and proceed and see if we can’t get the FAA bill done,” he told reporters.

Minority Leader Harry Reid (D-Nev.) and Democrats have been angling to see an extension of the Section 48 credit included for geothermal, fuel cells, combined heat and power, and other sources that were inadvertently left out of last year’s omnibus tax deal, which extended the credit for solar for five years.

Majority Whip John Cornyn (R-Texas) said Democrats refused to support the addition of other tax breaks that would have helped win GOP votes.

“There was an effort to include the green energy tax credits, but Senator Reid and the Democrats would not agree to other provisions that I think would grow the vote and made it possible to get that done,” he told E&ENews PM. “That having failed, we’re going to have a fairly lean finance amendment added to it, and we’ll hopefully complete our work by the middle of next week.”

Reid dismissed suggestions that Democrats were to blame as “ridiculous,” ticking off a list of tax breaks favored by Republicans that were in the mix to try to court reluctant GOP senators.

“All we wanted is Section 48C put in there in the tax portion,” Reid told reporters. “We didn’t go for beer, distilled spirits; we didn’t go for rental cars; we didn’t go for all that garbage. That was all theirs, not us.”

He laid blame squarely on the network of organizations funded by the Koch brothers, which in recent days has urged lawmakers to oppose any FAA bill that includes renewable tax breaks.

“They’re the ones that killed this bill,” Reid said.

Sen. Chuck Schumer (D-N.Y.) said that Republican leaders had indicated they could maybe muster 20 votes for the tax deal, “but then the Koch brother letter came out” — a reference to the Americans for Prosperity “key vote” letter released yesterday (E&E Daily, April 11).

“I don’t believe they could have gotten 16 votes,” he told reporters. “What killed it was the clean-energy stuff that the Koch brothers were opposed to, and Republicans won’t buck the Koch brothers.”

Reid reiterated that the Section 48 tweak Democrats sought was necessitated by an error last year — which he said Senate Majority Leader Mitch McConnell (R-Ky.) acknowledges.

“Now he said he’s going to do it later, and I’m going to keep pushing and we’ll see what happens,” he said.

Thune suggested there may be another vehicle later in the year for addressing expiring tax provisions.

“There’s always something that happens late in the year; generally there’s some sort of tax vehicle that could carry stuff,” he told reporters.