Sept. 26 (Bloomberg) -- The U.S. House passed a tax measure that is different from a Senate-passed bill and could jeopardize enactment of solar energy tax breaks and other expiring incentives.

The House bill, which faces a presidential veto threat, passed on a 257 to 166 vote margin. Its approval has set up a battle likely to play out this weekend with the Senate, where members have insisted that only their measure can be enacted. The White House earlier this week signaled its willingness to sign the Senate bill, which passed Sept. 23 by a 93 to 2 vote.

``We are in jeopardy of losing this because the House seems to want to have a small number of people control something that has been passed by a large majority,'' Senator Maria Cantwell, a primary sponsor of the Senate energy measure, said in a phone interview. ``Pass the Senate bill. That's the compromise that has been worked on for nine months,'' the Washington Democrat said.

New York Democratic Representative Charles Rangel said his $15 billion energy plan is not controversial. Among the primary hurdles is insistence by a group of conservative Democrats, so called Blue Dogs, on retaining House provisions that pay for both years of a $42 billion non-energy tax package. The Senate bill offsets just one year.

``There is a cloud of politics that remains above our shoulders,'' Rangel, chairman of the House Ways and Means Committee, said of the dispute with the Senate. ``They do not have to accept it, but they shouldn't have the arrogance of saying they are not going to look at it.''

Compromise

Montana Democrat Max Baucus, the Senate's lead negotiator, said in an interview today that he was confident of a compromise.

The White House Office of Management and Budget said senior advisers to President George W. Bush would recommend a veto of the House measure because it raises taxes and separates the Alternative Minimum Tax proposal in the Senate package from the main bill.

Differences from the Senate measure, include eliminating a $1.1 billion tax break for carbon capture mostly from coal plants and a nine-month increase to a tax credit for geothermal and biomass sources. The House bill also leaves out a tax credit for rebuilding refineries so they can process heavy oil, such as that produced in Canada's tar sands region.

Solar Energy

The bill retains an eight-year tax extension for solar energy, tax breaks for energy efficiency and incentives for plug-in hybrids, but alters their value.

The non-energy portion of the bill renews tax breaks for businesses and individuals. It pairs the incentives with a tax increase on multinational corporations that is likely to draw opposition from Republicans in the Senate.

The bills are anchored by a research credit worth about $8.6 billion annually for businesses and a separate provision that allows U.S.-based financial services companies such as General Electric Co., American International Group Inc., and Citigroup Inc. to defer tax on their foreign profits.

The Alternative Minimum Tax would spare 24 million American households from $61 billion in additional taxes this year. This so-called ``patch'' provision expires annually and would affect millions more families every year because the levy was never indexed for inflation.

The revenue-generating provisions include curtailing a tax break oil companies get for job creation and for overseas production and ending the ability of hedge-fund managers to defer taxes on profits earned in offshore funds.

Congress should ``be very mindful of what the impact is of more taxes,'' Marvin Odum, president of the U.S. subsidiary of Royal Dutch Shell Plc, told reporters today in Washington. ``My belief is more taxes means less investment goes into production in this country.''

To contact the reporters on this story: Daniel Whitten in Washington at dwhitten2@bloomberg.net; Ryan J. Donmoyer in Washington at +1- rdonmoyer@bloomberg.net

Last Updated: September 26, 2008 17:02 EDT