Lawmakers aim to revive broad extenders deal

Source: By Geof Koss, E&E News reporter • Posted: Thursday, December 19, 2019

Key senators indicated yesterday they intend to revive the push for clean energy tax breaks in 2020, after the Trump administration torpedoed a broader tax deal allegedly struck by congressional negotiators that would have included more incentives sought by Democrats in the talks.

Senate Minority Leader Chuck Schumer (D-N.Y.) said yesterday he was “particularly and strongly disappointed” the tax deal that emerged Tuesday morning did not include incentives for electric vehicles, battery storage, offshore wind and solar energy.

“This is a fight we’ve been waging and we will continue to wage,” Schumer said during a floor speech. “It’s a fight Democrats intend to return to in 2020 when we negotiate the next tax agreement.”

Finance member Maria Cantwell (D-Wash.) told E&E News yesterday that the expiration of the extensions next year will be a catalyst for a renewed push on energy provisions.

“You’ll have the same problem at the end of next year,” she said. “It’s going to be a big priority because we have climate change staring us in the face, and we can do something about it and get a better economic package.”

Senate Finance Chairman Chuck Grassley (R-Iowa), who has said he would have liked to have seen a bigger deal, indicated yesterday that he, too, wants to take another stab at it next year, noting that the May expiration of certain health care taxes may provide an opportunity to do so.

While Senate Finance members from both parties signaled Monday that they expected a tax deal with clean energy incentives to soon be announced, the deal came apart later that night in a meeting with Treasury Secretary Steven Mnuchin, who was negotiating with Congress on numerous tax issues.

The exact provisions in the deal that was allegedly agreed to by top House and Senate negotiators are unclear, but items considered to be part of the mix ahead of the pivotal Monday meeting included a five-year extension of a key offshore wind incentive, as well as at least one more year of the investment tax credit (ITC).

Sen. Tom Carper (D-Del.) this week blamed technical corrections to the 2017 tax law sought by the White House for the breakdown (E&E Daily, Dec. 18).

House Ways and Means ranking member Kevin Brady (R-Texas), who last month signaled that he was willing to make a deal on some clean energy provisions in exchange for technical corrections, pointed the finger at Democrats’ demands for an expansion of refundable tax credits as the culprit (E&E Daily, Nov. 22).

“The way I see it, what has evolved is a major ask for refundable tax credits in return for even the smallest of [technical corrections],” he told reporters. “There was no progress made in narrowing that gap.”

Shortly after the meeting broke up, a pared-back extenders package emerged that simply revived an assortment of expired or soon-to-be breaks through the end of 2020 (E&E Daily, Dec. 17).

Two exceptions included a multiyear extension of a biodiesel tax credit favored by Grassley, as well as a one-year extension of the renewable production tax credit (PTC), which is slated to expire at the end of the year under a 2015 tax deal.

‘Pretty darn convoluted’

Following the deal’s announcement, Grassley issued a statement that indicated he would have liked to have seen more in the agreement.

“This may not be the package I’d have pushed for on my own, but it’s a reasonable way forward that provides certainty where before there was only anxiety for many Americans,” he said.

Yesterday, he blamed a “pretty darn convoluted” process for the failure to do more this year, and offered his own narrative of the weekend talks and Monday night meeting.

Following a Saturday tweet in which he complained about being shut out of talks between Speaker Nancy Pelosi (D-Calif.) and Mnuchin, Grassley said he spoke twice Sunday with Pelosi, who was traveling in Europe.

Grassley said the two then agreed to launch staff negotiations on a “big package,” but became concerned there wasn’t enough time to complete a deal before the appropriations bill that would be the legislative vehicle for the tax deal had to be filed on Monday.

A decision was then made to do “something very small,” he recounted yesterday.

“We went to bed Sunday night with probably just a simple extension of 32 tax credits through 2020,” Grassley said. “And then I’m not going to say who, but somebody interrupted that, said, ‘You gave up too much.’ So then we started with a big package the next day. And then what did we end up? Exactly where we were Sunday night.”

Like Grassley, Cantwell said she’d like to see a “better regular order” process for extenders in the new year.

“There probably will be lot of ‘let’s do this through the committee regular order’ discussion earlier, not waiting until, like, December,” she said.