By: Kelsey Snell
The House voted overwhelmingly on Wednesday to renew more than 50 expired tax breaks for individuals and businesses through the end of this year, with the Senate looking increasingly likely to follow suit.
The one-year retroactive renewal, which passed by a 378-46 vote, includes heavily lobbied business breaks like those for corporate research, wind production, renewable fuels, corporate expensing and expanded depreciation schedules. It also includes tax breaks for individuals including a deduction for mortgage debt forgiveness, a break for state and local sales taxes paid as well as breaks for teachers and commuters.
The majority of members who spoke in favor of the bill said they would vote for the extension because it was the only option, not because it was a good one.
“To not act would disrupt the coming tax-filing season for millions of American workers and businesses, which have relied on Congress to extend these provisions and will, in a matter of weeks, begin filing their 2014 tax returns,” said Rep. Sander Levin of Michigan, the top Democrat on the Ways and Means Committee. “As a result I will support this measure.”
House Ways and Means Committee Chairman Dave Camp (R-Mich.) said the bill was “a different and less effective approach” than a tentative deal he negotiated with Senate Majority Leader Harry Reid last week.
Those negotiations fell apart after President Barack Obama threatened to veto the proposal before it was completed.
That pact, which would have made several business provisions permanent, caught the ire of the White House and many liberals who objected to setting the corporate benefits in stone while not touching Democratic priorities like expansion of the child tax credit and earned income tax credit.
House Democratic Whip Steny Hoyer (D-Md.) thanked the retiring Camp for his courage in drafting tax reform, adding, “I’m not going to thank you for this bill however.”
The vote put pressure on the Senate to follow the House, which seemed increasingly likely late on Wednesday.
A spokeswoman for Senate Finance Chairman Ron Wyden (D-Ore.) said he did not see a path forward for his preferred two year deal, blaming Republicans for failing to take his offer to make some business breaks permanent.
“As recently as this past Sunday we offered a reasonable, balanced deal to House Republicans, which they refused. This included a two-year extension with permanent R&D and other permanent provisions that support working individuals, families and business,” Wyden spokeswoman Lindsey Held said in an email to POLITICO.
“We are disappointed that at this point there doesn’t appear to be a procedural path forward,” she said.
Republicans, including Senate Minority Whip John Cornyn (R-Texas), said the president’s veto threat created a steep hill to climb to reach a deal and not much time to climb it.
“I think there are some people still trying to come up with an alternative but time is running out,” Cornyn said.
The 10-year cost of the one-year bill is about $42 billion. Lawmakers are under pressure to take action before the end of this year so that taxpayers can claim the breaks on their 2014 tax returns.