The House has approved legislation to provide $17.6 billion in tax incentives for energy conservation and renewable power sources, but the 236-182 vote on Feb. 27 fell short of the two-thirds margin needed to overturn a threatened presidential veto.
The measure, approved Feb. 27, includes some new tax breaks and multiyear extensions for others that are scheduled to expire at the end of December. The largest item is a three-year extension of the production tax credit for wind, geothermal and other renewables. That break is estimated to cost $6.6 billion over 10 years.
Environmental groups and other advocates of renewable energy praised the House action. But Republican leaders slammed the bill because it offsets the cost of the energy tax incentives by provisions that effectively would raise taxes on oil companies.
The largest revenue-raising offset would bar major oil companies from taking a deduction they’re allowed under current law for domestic oil and gas production. The bill also would freeze the deduction for others who now use it. That provision would raise an estimated $13.6 billion over 10 years, according to the congressional Joint Tax Committee.
Similar energy tax legislation has been considered in Congress in the past couple of years, but the White House has objected to those bills and GOP legislators have blocked the measures from being enacted. Republican Whip Roy Blunt (Mo.) sees the same outcome this time. “Nobody expects this bill to become law,” he says.
The White House Office of Management and Budget on Feb. 26 issued a statement criticizing the new House bill and warning that administration officials would recommend a presidential veto. OMB said that “the bill would use the tax code to target tax increases on a specific industry in a way that will lead to higher energy costs to U.S. consumers and businesses.”
But House Democratic Caucus Chair Rahm Emanuel (Ill.) is more optimistic about the outlook for the bill.
