Senate Finance Committee Chairman Max Baucus (D-Mont.) unveiled energy tax legislation that would extend the much-needed tax credits for renewable energy that are set to expire at the end of the month.
Baucus said in a statement he intends to bring the measure to the Senate for consideration this month. However, because the measure proposes to pay for tax relief by cutting tax benefits to the five biggest oil producers–an approach that has already failed on at least two occassions in the past year–this attempt is likely to be blocked by Senate Republicans.
The only difference this time may be that the measure has the support of finance committee ranking member Chuck Grassley (R-Iowa). Yet, it’s not clear how this measure, in its current state, gives much ground to Republicans, who have blocked numerous similar attempts since the beginning of the year.
Provisions in the bill do include an increase in the nuclear production tax credit, which many Republicans support.
Other provisions include:
- Extensions for alternative fuels credits
- Long-term extensions of wind and solar energy tax credits
- Consumer credit of up to $7,500 for plug-in electric vehicles
- New credit for capture and storage of carbon dioxide
- Extension of tax incentives for energy-efficiency including buildings, appliances and smart meters
- Long-term extensions of credits for alternative transportation fuels
- $2.5 billion in new credits for "clean" coal facilities
- New tax incentive for smart meters, which provide real-time feedback on electricity use
The objectionable provision to Republicans will be that the cost of the bill is offset in part by reducing the manufacturing deduction for the domestic manufacturing activities of the five largest oil and gas companies.
Ultimately, the bipartisan energy packages, presented in the House and the Senate in August, probably have a greater chance of being approved. These bills call for a compromise–extending tax credits for renewable energy and reducing incentives for Big Oil, while also lifting the moratorium on offshore drilling.
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