They are proposing to continue a program that allows companies to claim grants instead of tax credits, extend the main tax credit for wind energy production and revive a program that provided tax credits to manufacturers.
“I don’t think that’s final at this point,” Senator Kent Conrad, a North Dakota Democrat, said in an interview yesterday. “That’s what we’re pushing for.”
They are seeking to include the tax breaks in a bill that would extend a payroll tax-cut for workers before it expires on Dec. 31. The tax bill is one of the few remaining items for Congress to debate before leaving Washington for the year.
Though Senate Majority Leader Harry Reid hasn’t introduced a payroll bill that can clear his chamber, there was growing optimism yesterday that a stalemate over how to cover the cost of the measure would be broken soon.
The “momentum’s building” toward a deal, Senate Finance Committee Chairman Max Baucus, a Montana Democrat, told reporters yesterday. “The train is starting to come down the track.”
House Speaker John Boehner said there was “some movement” toward resolution marked by a new willingness by Democrats to compromise.
Senate Majority Whip Richard Durbin of Illinois said yesterday that Democrats were open to dropping a provision that would impose a new tax on income exceeding $1 million. The surtax is one of the chief hurdles to a deal with Republicans.
Lawmakers prepared to remain on Capitol Hill this weekend to complete a payroll package that could clear the Democratic- controlled Senate and the House of Representatives, where Republicans hold a majority.
Through the grant program, which also expires Dec. 31, companies receive cash instead of tax credits. The credits are less valuable when companies don’t have taxable income to offset.
The wind credit doesn’t expire until the end of 2012. Industry advocates have been urging Congress to extend it now, because the deadline applies to the start of energy production, meaning that the potential expiration affects investment decisions before the deadline.
The advanced energy manufacturing credit, created in a 2009 economic stimulus law, has effectively expired.
Senator Jeff Bingaman, a New Mexico Democrat, said he has been advocating for the energy tax provisions’ inclusion in a year-end tax bill.
“It’s been discussed extensively,” he said in an interview yesterday.
Reid said Dec. 13 that he planned to add the tax provisions to the House-passed bill, which extends an expiring payroll tax cut for employees. He said the tax package would add $35 billion to the bill’s cost without specifying which provisions would be included.
The wind credit and the manufacturing credit wouldn’t be included if the tax package were limited only to provisions expiring Dec. 31.
The list of provisions that would be extended includes others that have previously lapsed and been revived, including the research and development tax credit, the optional deduction of state sales taxes and a tax credit for companies that hire welfare recipients and other members of disadvantaged groups.
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