Action on Extenders Stalls in Senate Over Procedure

May 21, 2014

capitol-building-bush-tax-cuts.gi.topLast Thursday, work on the tax extenders bill (S. 2260), which was offered as a substitute amendment to a House-passed bill (H.R. 3474), stalled in the Senate over procedural disputes. The underlying measure would exempt veterans and reservists who receive federal health care from being counted toward the employer mandate under the 2010 health care overhaul. S. 2260 would renew for two years almost all of the tax breaks that expired on Dec. 31, 2013—including several business tax extenders such as—Section 179 expensing and the research tax credit.

On April 3, when the tax extender bill was marked up in the Senate Finance Committee, the process was open to amendments and vigorous debate which allowed all 24 members, Republicans and Democrats, to voice the opinions of their constituents and share their concerns.

Unfortunately, the floor exercise did not replicate this approach – instead Senate Majority Leader Harry Reid (D-Nev.) and Republicans were locked in a dispute over whether they would be able to offer amendments to the legislation. Reid opted to fill the amendment tree in order to prevent Republicans from specifically attaching a medical device tax repeal that was put in place by the Patient Protection and Affordable Care Act in 2010. Since Reid invoked a procedural move restricting senators from offering amendments on the floor, the minority in turn blocked the procedural motion by a vote of 53-40 that would have allowed the bill to move forward—60 votes were required for passage.

As approved by the Finance Committee, the tax extenders legislation would, among other provisions, temporarily extend an expanded version of research and experimentation credit; increased section 179 expensing limits; and 15-year straight-line cost recovery for qualified leasehold improvements, qualified restaurant buildings and improvements, and qualified retail improvements. The Joint Committee on Taxation estimated that Finance Committee Chairman Ron Wyden’s (D-Ore.) substitute to H.R. 3474, which is largely unoffset, would increase the deficit by nearly $85 billion over 10 years.

Finance Committee leaders are expected to meet soon to figure out a path forward on the measure and a possible amendment agreement. Republican leaders want to have negotiations over amendments before another cloture is invoked on the bill. Whether or not a vote is possible before the Memorial Day recess is still uncertain. Since tax bills have to originate in the House, the Senate will still need to return the measure to the House with its tax language, once completed.

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