Congressional Democrats are taking another run at legislation that would extend tax credits for the renewable energy industry that are set to expire at the end of the year, while repealing tax breaks for big oil corporations.
Yesterday the House passed by a vote of 236 to 182 H.R. 5351 (Renewable Energy and Energy Conservation Tax Act of 2008) that would repeal $18 billion in tax breaks for oil companies and use the money instead to extend tax incentives for wind power, solar power and other clean energy initiatives for eight years.
The House has passed a similar measure before, only to have it stall in the Senate, where twice it has failed to secure enough votes to avoid a Republican filibuster. Senate Democratic leaders said they will put the bill on a fast track and again try to overcome the threat of filibuster.
Republicans say the bill unfairly penalizes the oil companies, who would no longer be able to exclude a certain portion of their oil and gas production income from U.S. taxes and would have to pay U.S. taxes on some foreign income that was already taxed in the countries where it was earned.
According to the House Ways and Means Committee, repealing the oil tax breaks would cost the five largest oil companies an average of $1.8 billion a year over ten years. The AP reported that those same companies earned $123 billion last year.
"It punishes the oil and gas industry. This is wrongheaded. It will result in higher prices at the gasoline pump. It’s spiteful and wrong," said Rep. Jim McCrery, (R-La).
It seems that higher gas prices are exactly what the Democrats are relying on in garnering support for the measure.
House Majority Leader Steny Hoyer (D-Md) said, "With the price of oil hovering around $100 do we really believe this incentive is justified?" Do these (oil) companies need taxpayer subsidies to look for new product? They don’t need any incentive."
The bill extends the 30% investment tax credit for renewable energy projects through the end of 2016. The bill removes an existing limitation that prevents public utilities from claiming the investment tax credit and allows the energy credit to be used to offset alternative minimum tax (AMT). This proposal is estimated to cost $621 million over ten years.
A broad coalition of 120 corporations, environmental groups, investors, labor, nongovernmental organizations, public health organizations, and utilities are urging Congress to pass the measure. The group includes heavyweights like Wal-Mart Stores, Best Buy Co., The Home Depot, and Dow Chemical, Florida Power and Light and Pacific Gas & Electric, the Sierra Club and the United Steelworkers.
Should the measure pass in the Senate, senior advisers would urge Bush to veto the bill, the White House said in a statement before the House vote yesterday.
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