Tax Package Heads for House Passage Despite Senate Grumbling

Senate Democrats still want a longer-term measure, but the White House threatened to veto an earlier bipartisan proposal.

The House is prepared to take action Wednesday on extending for one year a package of special-interest tax breaks that even its Republican sponsors admit is a disappointment, while some lawmakers are still holding out hope for an alternative.

But with time winding down during this lame-duck session, prospects for a revised approach appeared limited amid continued grumbling over the White House's handling of the issue.

In the Senate in particular, some Democrats were still mulling a broader package. Such talk has fueled speculation that House Republicans may hold onto their bill a few days after passage before transmitting it over—to limit Senate tinkering. A spokesman for Speaker John Boehner denied that would be the case.

"We need to act," said House Ways and Means Chairman Dave Camp, casting the House bill as essentially the only option remaining for lawmakers after the White House threat last week to veto a broader measure.

Negotiations on that earlier plan, led in part by Senate Majority Leader Harry Reid, were leading toward making permanent some popular business provisions—and extending many other breaks for two years, through 2015.

But the White House last week said that the package was too tilted in favor of business breaks, and didn't do enough for workers and the poor. For instance, it didn't extend an expansion of the Earned Income Tax Credit and the Child Tax Credit.

What has been left for lawmakers to do, Camp said in an appearance before the Rules Committee, is to again enact a one-year extender package, which includes more than 50 provisions benefiting businesses, individuals, and others. Most expired at the end of 2013, but could be claimed on 2014 tax forms if Congress acts now.

This was not the end to 2014 that Camp, who is retiring from Congress, and others had envisioned on the tax front. Lawmakers, including Boehner, had said that a priority at the start of this two-year session would be a wide tax-code revision.

But that promised reform never happened. And now, lawmakers are once again seeking to pass a late-year extenders package with breaks for NASCAR and other motor speedways, racehorse owners, and other narrowly-tailored items that have for years been controversial, but continue to be renewed.

The House measure is expected to pass. Ways and Means ranking member Sander Levin is among Democrats who support it over what was being negotiated last week. But in the Senate, some Democrats were still talking about a broader package.

Senate Finance Committee Democrats met behind closed doors Monday. Committee member Jay Rockefeller said he would like a two-year tax extender and raised concerns that the House's bill doesn't do enough for the population he's looking to help—the poorest 40 percent.

"There is a unanimous feeling [on] the part of the Democrats in the Finance Committee that that's not acceptable," Rockefeller said.

Finance Chairman Ron Wyden also has concerns with the House bill, chief among them the future of tax-break extensions for low-income, working-class families.

"When everybody comes back in January of 2015, you can be sure that the powerful will be well represented," Wyden told National Journal, "and the question will be what will happen to the working-class priorities."

His solution: The EXPIRE Act, bipartisan bill that the Senate Finance Committee has already passed. "What I can tell you is the Finance Democrats had a very productive conversation last night, and game on," Wyden said.