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Tags: tax | bill | spending | budget

House Adopts $622 Billion Plan to Revive Expired Tax Breaks

Thursday, 17 December 2015 04:14 PM EST

The House adopted a $622 billion measure to revive dozens of business and individual tax breaks -- making some of them permanent -- ahead of a vote Friday on a companion plan to fund the U.S. government and lift the ban on crude oil exports.

The vote Thursday was 318-109. The House and Senate plan to take final votes on the tax and spending bill Friday before leaving Washington for the holidays. President Barack Obama has announced his support for the plan, and House Minority Leader Nancy Pelosi said Thursday she will vote for the spending measure although she opposed the tax-extension plan.

“Finally with this tax bill, families and businesses are going to get the long-term certainty that they need," House Speaker Paul Ryan, a Wisconsin Republican, told reporters during a news conference before the vote.

Congress has repeatedly extended the group of several dozen tax breaks for one or two years at a time. The measure adopted Thursday would make a number of them permanent, including those for business research and development, small business expenses, individual deductions for state and local sales taxes, and financing rules for multinational corporations. Also to become permanent are an enhanced child tax credit and earned income tax credit, as well as tax breaks for charitable giving and schoolteachers’ expenses.

The move "will deliver predictability, clarity and certainty for individual taxpayers as well as people managing businesses and trying to invest for the future," House Ways and Means Committee Chairman Kevin Brady, a Texas Republican, said before the vote.

Backing the measure were 241 Republicans and 77 Democrats, while three Republicans and 106 Democrats opposed it.

Wind Energy

The wind energy production tax credit would be extended for five years, a move sought by Democrats. The plan also would continue tax breaks for racehorse owners, motorsports facilities -- the so-called "NASCAR tax break" -- and some charitable contributions.

The tax measure would suspend the Affordable Care Act’s 2.3 percent tax on medical devices through 2017. The spending plan also would delay the so-called Cadillac tax on high-cost health insurance plans from 2018 to 2020.

The tax proposal is the first of a two-part deal reached by congressional Republican and Democratic leaders this week. The House plans to vote Friday morning on the $1.1 trillion spending plan, which includes an end to the 40-year-old ban on exporting crude oil from the U.S. The Senate then will vote Friday on the full package, H.R. 2029.

Pelosi said during a news conference Thursday that while she’ll support the spending measure, other Democrats plan to oppose it.

‘Serious Unease’

“We have serious unease in our caucus,” she said. She said members of the Progressive Caucus believe the plan is weighted too heavily toward aiding corporations, while other Democrats want more help for financially troubled Puerto Rico.

Representative Earl Blumenauer, an Oregon Democrat, said he believes there will be enough support to help Republicans pass it. Liberal Representative Rosa DeLauro, a Connecticut Democrat, announced her backing for the spending bill on the House floor.

"It is a down payment on reducing the austerity of the last few years," said DeLauro, who backs the plan’s spending increase for the Department of Health and Human Services.

Democratic support is critical toward securing passage of the spending plan, because many conservative Republican members of the Freedom Caucus are lining up to oppose it.

"It is going to bust the deficit. We are not doing anything for yet another year to take the debt burden off our kids and grandkids," said Republican John Fleming of Louisiana.

‘Just Plain Wrong’

Pelosi opposed the tax extension measure, though, because most of the tax breaks aren’t paid for and will increase the deficit. “It’s just plan wrong and I intend to vote against it,” she said before the vote.

Michigan Democrat Sander Levin on Thursday called the tax plan a budget-busting measure that leaves “more room to cut taxes for the very wealthy” in the future.

“For those whose purpose is to have the increase in the deficit continue to drive down non-defense spending, this bill will almost certainly accomplish this,” Levin said. “These cuts seriously threaten programs that assist the middle class or those striving to reach the middle class -- programs like Head Start and Pell Grants, and in job training and basic health research.”

© Copyright 2023 Bloomberg News. All rights reserved.

The House adopted a $622 billion measure to revive dozens of business and individual tax breaks -- making some of them permanent -- ahead of a vote Friday on a companion plan to fund the U.S. government and lift the ban on crude oil exports.
tax, bill, spending, budget
Thursday, 17 December 2015 04:14 PM
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