White House Enters Fray on Rival Tax Extender Plans

White House Enters Fray on Rival Tax Extender Plans

The White House jumped into the battle in Congress over expired tax breaks on Tuesday as House Republicans and Senate Democrats prepared to move forward with rival plans for the tax extenders.

The Obama administration issued a veto threat against a House bill (HR 4438) scheduled for a floor vote on Wednesday that would make permanent the research and development tax credit, even as the White House said it supported the idea of embedding the credit in the tax code.

Echoing criticism from congressional Democrats, the White House said in a Statement of Administration Policy that it opposes the permanent extension because it would not be offset and would add $156 billion to the deficit. “Moreover, if this same, unprecedented approach of making major traditional tax extenders permanent without offsets were followed for the other traditional tax extenders, it would add $500 billion or more to deficits, wiping out most of the deficit reduction,” the White House said.

That puts Democrats in a potentially tenuous position because they are not calling for offsets for other economic measures including the larger package (S 2260) of temporary extenders awaiting action in the Senate. But Democrats and the administration are focusing on the different approaches to cast a contrast with Republicans ahead of the midterm elections.

GOP lawmakers “are making clear their priorities by rushing to make business tax cuts permanent without offsets even as the House Republican budget resolution calls for raising taxes on 25 million working families and students by letting important improvements to the Earned Income Tax Credit, Child Tax Credit, and education tax credits expire,” the White House wrote.

Majority Leader Harry Reid of Nevada and Senate Democrats, meantime, are working on a plan to take up their two-year extension of the broad package of about 50 tax breaks next week, with supporters trying to work out an accord on potential amendments.

Several caucus members said Reid and other party leaders, including Finance Chairman Ron Wyden of Oregon, discussed plans for taking up the measure the week of May 12. “It’s on the schedule for next week,” said Sen. Benjamin L. Cardin, D-Md., a Finance member.

Majority Whip Richard J. Durbin, D-Ill., said Reid made clear at a luncheon with fellow Democrats that Wyden would play a key role in trying to broker a deal to head off contentious amendments. They hope to hold together the bipartisan majority on Finance that allowed the measure to pass the panel by voice vote last month.

Senate Republicans gave mixed signals on the tax extension package this week, and vowed to seek amendment votes. Roy Blunt of Missouri, vice chairman of the GOP conference, leaned in favor of a continuation of tax breaks, many of them highly prized by business. “I’m sure we want amendments, but extending these current things in the code is a positive thing,” Blunt said.

, ,