Republicans Poised to Block Tax-Cut Revival in Senate
U.S. Senate Republicans probably will block more than $80 billion tax cuts because of their objections to how Democrats are running the Senate.
Republicans, who support many of the provisions in the bill, are complaining about Democrats’ refusal to allow them to offer amendments. If the measure doesn’t advance today, the tax breaks would be in limbo including those for corporate research and wind energy.
Senator Bob Corker, a Tennessee Republican, predicted that a test vote scheduled for this afternoon would fail, citing a consensus of party members. Senator Charles Grassley of Iowa, who supports extension of the wind credit, said he would vote against advancing the measure.
Democrats say the bill must move forward to prevent a tax increase.
“If you don’t renew that provision, the research and development credit, in effect, today, the Senate will be voting to raise taxes on innovation,” Senate Finance Committee Chairman Ron Wyden, an Oregon Democrat, said on Bloomberg Television.
The bill would revive dozens of tax breaks that lapsed on Dec. 31 and extend them through 2015, including the ability for companies such as Citigroup Inc. (C) to defer U.S. taxes on overseas financing income and a provision that lets individuals deduct state sales taxes.
The bill doesn’t include spending cuts or tax increases to offset the $84.1 billion effect on the budget deficit.
Today’s procedural vote requires at least 60 senators to support it. That means at least five Republicans must join with Democrats for the measure to advance.
Final passage wouldn’t occur until next week, and the Republican-led House has been taking a different approach to the issue.
Senate Majority Leader Harry Reid told reporters today that senators should be able to offer pertinent amendments. Wyden and Republicans haven’t been able to reach an agreement on which amendments to consider.
“It has to be related to the bill,” Reid said, adding that the Republicans “want to offer amendments on everything.”
Wyden said on Bloomberg TV that the measure lets Congress focus on a broader revamp of the tax code that would lower the corporate tax rate and address the trend of inversion transactions, in which U.S. companies use mergers to move their legal addresses to lower-tax countries.
Wyden wouldn’t answer directly when asked whether his broader tax bill should raise additional revenue for the U.S. government, as most Democrats insist.
Republicans prefer a revenue-neutral approach, where the money gained from limiting tax breaks is used to reduce rates.
“When you create jobs, you generate growth, which generates revenue,” Wyden said. “Some of this is Washington Beltway talk. The reality is pro-growth tax reform is going to generate revenue.”
Wyden’s bill is S 2260. Democrats want to add it to HR 3474.
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