Floor Speech of Senator Chuck Grassley on Tax Extenders
Delivered Tuesday, Dec. 9, 2014
This week, the Senate is finally poised to take up and pass a tax extenders bill. Congress’ procrastination on tax extenders has been causing a lot of headaches and indigestion for many of my constituents back home.
Small business owners and farmers want to know whether the enhanced expensing rules under Section 179 will be extended so they can invest in new machinery. Retirees want to know whether they can make a charitable donation from their IRA to meet their required minimum distribution. The renewable energy sector wants to know what investments they should make to increase production.
The Senate could have made strides toward answering these questions this past spring.
The Finance Committee acted in bipartisan fashion to report an extenders package to the floor that would have extended all expiring provisions for two years. By all accounts this package could have passed the Senate with broad support on both sides of aisles.
Unfortunately, movement of this package in the Senate stalled in May due to procedural maneuvering on the Senate floor to prevent votes on all amendments, even those with bipartisan support. With the Senate failing to take action, the hopes of getting extenders done in a timely fashion faded.
However, there were high hopes that a bipartisan deal could be worked out with the House that could provide individuals and businesses much-needed tax certainty. Before Thanksgiving, House and Senate negotiators were making headway toward a bipartisan agreement that would have extended most provisions for two years and made several other provisions permanent.
The President then thwarted negotiations by threatening to veto that package before it was even finalized. Why the President would threaten to veto a package that by all accounts recognized bipartisan priorities, as well as priorities of the Administration, is beyond me.
The President’s stated complaint is that the deal was geared too heavily toward business. From an Administration that has regularly been advocating businesses-only tax reform, this complaint rings hollow.
Moreover, all of the business provisions that would have been made permanent under the proposed deal have long had strong support from both sides of the aisle, including this Administration.
For instance, the President’s fiscal year 2015 budget calls for both the research and development tax credit and the enhanced expensing rules under Section 179 to be made permanent. The bipartisan deal would have accomplished this.
The proposed deal also included priorities specific to the President and many of my Democratic colleagues. For instance, the American Opportunity Tax Credit enacted as part of the President’s 2009 stimulus bill would have been made permanent.
The President’s other named priorities were the enhanced refundable child tax credit and earned income credit, but it was the President’s own actions on immigration that made their inclusion a tough sell.
Many on my side of the aisle have long had concerns about fraud and abuse in both of these credits. The President’s executive action only served to enhance these concerns and added fuel to the fire by eroding established policy that prohibits undocumented immigrants from receiving the earned income credit.
The President may have a phone and a pen, but the last time I checked Congress is still a co-equal branch of government under the Constitution. When the President acts unilaterally, it should not surprise him when Congress responds.
So it is true the deal did not include everything the President would have wanted. But, it didn’t include everything Republicans would have wanted either. Nobody ever gets everything they want in bipartisan negotiations. The point of negotiating is to get something the majority of us can support.
By cutting off negotiations, the White House has left us with voting on something that’s barely better than nothing for some industries. This includes industries the President claims to be a priority of his, such as the renewable energy sector.
Forward policy guidance is critically important to the renewable energy sector.
The proposed deal would have provided certainty to wind energy through a multiyear phase-out that would have provided a glide path to self-sustainability. Other renewable provisions would have been extended for two years.
Instead, Congress is now faced with settling for a one-year retroactive extension that fails to provide any meaningful incentive for the further development of renewable energy. It also fails to provide certainty to other businesses and individuals as the provisions will once again expire almost as soon as they go into law.
I think we all agree that making tax law one year at a time in retroactive fashion is bad policy. Yet, that is the reality we currently face because of this Administration’s refusal to compromise.
While I would prefer longer extensions of these provisions, that is no longer a viable option. As a result, I intend to support the House package. My only hope is that in the new Congress we can make strides toward putting some certainty back in the tax code.
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