Both the Senate and the House of Representatives passed legislation to extend tax credits for renewable energy, hooray! However, they passed seemingly irreconcilable bills. With pressure mounting to adjourn and the Wall Street financial crisis looming overhead, the chances for finding the middle ground seem grim.
Of course both legislative bodies are blaming the other for the impasse. The Senate version, which the White House indicated it would sign, is part of an all-in-one package that includes tax rules for other unrelated tax credits (including another hot political button, the alternative minimum tax (AMT)). The House version splits the various tax credits into separate legislation and does not tie the AMT to the renewable energy tax credits.
That’s one point of contention; there are others. According to an Associated Press article by Jim Abrams, the funding mechanisms for the renewable energy credits differ. In the House version the renewable energy credits are paid for, in part, by limiting tax breaks available to the oil and gas industry and by eliminating ways that hedge fund managers and corporation pay taxes to account for overseas incomes. The Senate bill also funds the tax credits by limiting tax breaks to energy companies but not to the same extent.
Sorting through the differences quickly gets complicated. As a New York Times article points out, the renewable energy tax credits themselves are not controversial. But as reporter Robert Pear writes, “The dispute is a kind of proxy battle for a much bigger fight looming in the next Congress over whether to preserve tax cuts enacted under President Bush in 2001 and 2003.”
Having followed the fate of the renewable energy tax credits over the course of this year, it’s clear the points of contention have not changed. The Senators quoted in the news articles insist that their version of the bill reflects long hard months of negotiation that the House should not heedlessly throw away. In turn, the House resents the Senate’s all-or-nothing attitude. Finding a way out of this thicket appears to lack the guiding solar light it needs.
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