Renewable Tax Credits Hit Snag in Senate
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Efforts to extend renewable energy tax credits, which advocates have contended are needed in order to sustain boom times in alternative generation, hit a snag when the Senate could not muster enough votes to overcome a Republican filibuster.
The legislation, HR 6049, cleared the House by an overwhelming 263-160 vote last month. Sponsored by Rep. Charles Rangel, D-NY (pictured), it would extend tax credits for wind, solar and other renewable energy and energy efficiency improvements, many of which expire at the end of the year. Supporters fell 10 votes short of the 60 needed to end debate on the measure, which had drawn a veto threat from President Bush.
A separate but related bill to impose a windfall profits tax on large oil companies also failed to clear the procedural hurdle thrown up by Republicans. The measure also would have rolled back tax breaks for the industry worth an estimated $17 billion and put the money into renewable energy and energy conservation, according to the sponsors' description.
The renewable tax credit bill would extend for six years a 30 percent investment tax credit for solar energy and it would give a three-year extension to production tax credits for energy from biomass, geothermal, hydropower, landfill gas and solid waste. It would give a one-year extension of the production tax credit for wind energy, according to a summary put forward by the House Ways and Means Committee, which Rangel chairs. In a press statement at the time the bill passed the House, Rangel said the legislation would "enhance our ability to promote our energy independence through the use of renewable sources and create green-collar jobs for American workers."
Earlier this year, the Senate had passed a different version of a renewable tax credit extension but chances for that measure were viewed as uncertain in the House because it contained no provisions to pay for an estimated $6 billion in the incentives.
The bill, which its sponsors said would provide as much as $18 billion in incentives for renewable energy and other efforts, including carbon sequestration and marine renewable energy projects, would have been financed largely through shutting down or delaying tax breaks for individuals and companies involved in offshore activities. The bill also contained billions of dollars in tax credits for other purposes.
But it was the attempt to close what backers had called loopholes that had drawn the Bush administration's negative attention. Last month's statement said:
"Together, these provisions would increase tax burdens, undermine the competitiveness of U.S. workers and businesses, and could have adverse effects on the U.S. economy."
U.S. Sen. Mitch McConnell of Kentucky, the Senate's Republican leader, echoed those sentiments:
“Once again, our Democrat friends never miss an opportunity to sock Americans with a new tax hike. Their latest bill would permanently raise new taxes to temporarily extend expiring or recently expired tax relief to others. Raising taxes during times like these is exactly the wrong approach."
According to news reports, including a dispatch from The New York Times, Republicans said the Democratic energy plan would not lower gasoline prices and would hurt domestic oil production.
Immediately after the votes, the Sierra Club ripped the opponents of the measures. In a statement, the environmental group's executive director Carl Pope said:
“It’s truly shocking that senators will use procedural tricks to protect taxpayer-funded giveaways to Big Oil, but then mere minutes later will refuse even to allow debate on a bill that will protect existing jobs, create tens of thousands of new jobs, and help build the clean energy future we need to end our dangerous dependence on fossil fuels once and for all."
The solar industry also weighed in on the tax incentive bill's failure. Rhone Resch, president of the Solar Energy Industries Association said in a statement:
"It is difficult to understand why senators would choose to protect an income-tax loophole for billionaire hedge-fund managers instead of creating hundreds of thousands of renewable energy jobs in the US."
As Climate Law Update reported earlier this year, the solar group and its wind counterpart, the American Wind Energy Association, put forward a report estimating that loss of the tax incentives could threaten 116,000 jobs annually, as well as $19 billion in investments.
(Photo: Office of U.S. Rep. Charles Rangel)
