With lawmakers having abandoned efforts to reach a broader deal on reviving tax breaks that would have exceeded $400 billion over a decade, the House has voted in favor of a “bare minimum” package that provides $42 billion in temporary relief to individuals and corporations.
The measure, passed on a 378-46 vote, revives more than 50 lapsed tax breaks only to the end of this year, avoiding delays in refunds for taxpayers but leaving things unclear for 2015. Lawmakers said the one-year extension (retroactive to January 1) was the best option after the broader deal being negotiated by Senate Majority Leader Harry Reid of Nevada and Ways and Means Committee Chairman Dave Camp (R-Mich.) collapsed following a veto threat from President Barack Obama.
The Senate is expected to take up the bill within a week. Before the House vote, Democratic tax writers in the Senate had been pushing for a two-year extension of the tax breaks.
“The public deserves better than the equivalent of looking at a Magic 8-ball,” Senate Finance Committee Chairman Ron Wyden, Oregon Democrat, told reporters.
The disappointment was bipartisan. “This legislation is no solution to the challenges we face in America’s tax system,” Rep. Tom Price, a Republican from Georgia, told Bloomberg. “It simply buys more time for Congress to forge a long-term agreement on these specific items — some of which should not be extended in the future — and, more importantly, on fundamental tax reform.”
The tax breaks, which lapsed Dec. 31, 2013, aid businesses and individuals, providing incentives for business research and helping school teachers and distressed homeowners. Other incentives in the package are more controversial, The Hill noted, particularly a production tax credit prized by the wind industry.
The broader package would have locked in some benefits including the research tax credit by removing their expiration dates. Most of the other breaks would have been extended through 2015.
But Obama and Treasury Secretary Jacob J. Lew objected to the lawmakers’ plan not to extend tax credits for low-income and middle-income families that are scheduled to expire at the end of 2017.