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The House passed a tax bill Wednesday that would provide $20 billion in credits for renewable energy projects and other efforts to reduce greenhouse gas emissions, but the administration threatened to veto the measure.
The extenders package, which also includes a popular research and development tax credit, has been lobbied heavily by groups representing a variety of industries, most especially by wind and solar power companies that would get production and investment tax credits.
But the administration said it rejects the “pay-fors” in the bill. The proposal would raise $55 billion over 10 years by taxing hedge fund managers and delaying the implementation of rule change relating to how multinational corporations account for interest expenses.
“Overall, the administration does not believe that efforts to avoid tax increases on Americans need to be coupled with provisions to raise revenue,” the White House said in a statement of administration policy.
The bill would also give tax breaks to electric utilities that use geothermal power, “biomass” facilities and other renewable energy efforts.
The breaks include $2 billion worth of “clean energy bonds,” an issue that also creates a potential conflict with the White House.
The House bill applied Davis-Bacon prevailing wage requirements to projects financed with the bonds, which the White House called “unacceptable” in its statement of administration policy.
The bill also provides credits for energy efficiency projects and would give coal producers $1.5 billion worth of tax credits to develop carbon sequestration and other projects designed to reduce carbon dioxide emissions.
Senate tax writers like Finance Committee Chairman Max Baucus (D-Mont.) are reportedly receptive to the offsets identified by the House but have yet to produce a final version of the tax extenders bill. Senate Republicans have rejected offsets in earlier versions of the bill.
A House-passed bill to raise taxes on the oil and gas industry could not win sufficient support in the Senate to reach the president’s desk.
The U.S. Chamber of Commerce said in a statement that it welcomed some parts of the bill, such as the research and development tax credit and breaks targeted at restaurant owners and railroads.
But the Chamber joined the administration in opposing the tax offsets in the bill, a break provided to attorneys and the Davis-Bacon language.
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