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They put black liquor in. They took black liquor out. They put black liquor back in, and now everything has been shaken all about.
The offset hokeypokey is bedeviling senators as they try to resolve an impasse over a bill (HR 4213) that includes economic safety net spending and an extension of tax breaks that expired in December.
The biggest problem stems from “black liquor,” a papermaking byproduct that was seemingly eligible for a tax credit as a renewable fuel. A proposal to revoke that credit was estimated to generate $21.7 billion to help offset the cost of the version of the “tax extenders” bill that the Senate passed in March.
But now the offset is gone — thanks to the health care overhaul.
The House included the black liquor provision as an offset to help pay for its health care bill (HR 3962). The Senate initially rejected that approach in its own health care measure (PL 111-148). But, as part of a deal that removed other taxes and increased premium subsidies for low-income people, lawmakers agreed to put the black liquor offset into the budget reconciliation law (PL 111-152) that completed the health care overhaul.
Combined with another, smaller offset that was also used in the reconciliation law, senators are facing a $27.1 billion hole in the tax extenders bill, which would revive popular items such as the research and development tax credit, and there’s no agreement yet on how to fill it. The shortfall could be even deeper if Republicans insist on offsetting the cost of extended long-term unemployment benefits that are also part of the legislation.
The House version of the legislation includes a revenue-raising change in how some income is taxed for hedge fund managers and similar investment strategists, but the Senate has balked at that offset.
“I would describe the extenders debate as bringing new meaning to the word ‘fluid,’” said Democratic Sen. Ron Wyden of Oregon, a member of the tax-writing Finance Committee.
Furthermore, every offset used for the tax extenders bill just complicates the next bill in line. In this case, that’s a draft bill concerning small-business jobs written in part by Olympia J. Snowe of Maine, a Finance panel member and the ranking Republican on the Small Business and Entrepreneurship Committee.
“That reverberates,” Snowe said of using black liquor for health care. As a result, she said, it’s harder to find acceptable offsets for the small-business bill.
Wyden, an advocate of a base-broadening, rate-lowering tax code overhaul (S 3018), said that a big-picture approach is the best way to avoid the “extend-o-rama.”
Otherwise, he said, “you’re always chasing to find a pea in somebody’s pocket.”
The offset hokeypokey is bedeviling senators as they try to resolve an impasse over a bill (HR 4213) that includes economic safety net spending and an extension of tax breaks that expired in December.
The biggest problem stems from “black liquor,” a papermaking byproduct that was seemingly eligible for a tax credit as a renewable fuel. A proposal to revoke that credit was estimated to generate $21.7 billion to help offset the cost of the version of the “tax extenders” bill that the Senate passed in March.
But now the offset is gone — thanks to the health care overhaul.
The House included the black liquor provision as an offset to help pay for its health care bill (HR 3962). The Senate initially rejected that approach in its own health care measure (PL 111-148). But, as part of a deal that removed other taxes and increased premium subsidies for low-income people, lawmakers agreed to put the black liquor offset into the budget reconciliation law (PL 111-152) that completed the health care overhaul.
Combined with another, smaller offset that was also used in the reconciliation law, senators are facing a $27.1 billion hole in the tax extenders bill, which would revive popular items such as the research and development tax credit, and there’s no agreement yet on how to fill it. The shortfall could be even deeper if Republicans insist on offsetting the cost of extended long-term unemployment benefits that are also part of the legislation.
The House version of the legislation includes a revenue-raising change in how some income is taxed for hedge fund managers and similar investment strategists, but the Senate has balked at that offset.
“I would describe the extenders debate as bringing new meaning to the word ‘fluid,’” said Democratic Sen. Ron Wyden of Oregon, a member of the tax-writing Finance Committee.
Furthermore, every offset used for the tax extenders bill just complicates the next bill in line. In this case, that’s a draft bill concerning small-business jobs written in part by Olympia J. Snowe of Maine, a Finance panel member and the ranking Republican on the Small Business and Entrepreneurship Committee.
“That reverberates,” Snowe said of using black liquor for health care. As a result, she said, it’s harder to find acceptable offsets for the small-business bill.
Wyden, an advocate of a base-broadening, rate-lowering tax code overhaul (S 3018), said that a big-picture approach is the best way to avoid the “extend-o-rama.”
Otherwise, he said, “you’re always chasing to find a pea in somebody’s pocket.”
