House Moves on Extenders and Omnibus DealDecember 3, 2014
The House may vote on a bill—as soon as today—that would extend through the end of the year a number of expired tax provisions, known as “extenders.” Unfortunately the extenders bill would only extend those provisions through 2014, essentially giving business owners only a handful of days to make major spending decisions.
The bill, the Tax Increase Prevention Act of 2014 (H.R. 5771) was introduced by House Ways and Means Committee Chairman Dave Camp (R-Mich.), on Monday. H.R. 5771 would provide extensions for numerous tax provisions for businesses, including the research and experimentation (R&E) credit, the work opportunity credit, bonus depreciation, expanded Section 179 small business expensing, and the production tax credit (PTC) for wind and certain other renewable sources of electricity.
The bill was introduced after President Barack Obama threatened last week to veto a potential agreement that would have made some extenders permanent and renewed others for two years. The Senate Finance Committee earlier this year approved a bill that would extend many extenders through 2015, but that legislation never passed the full Senate. Republicans are likely to revisit the idea of making some of the extenders permanent next year, when they have full control of both the House and Senate.
On Nov. 12, NSBA sent a letter to Congress encouraging them to address the tax extenders that have been in limbo since their expiration last December. The letter underscored the fact that this uncertainty resulting from such temporary tax policy makes it difficult for small businesses to plan effectively for the future, and makes it increasingly difficult to remain competitive in an increasingly global marketplace. The letter also highlights a select few of these business tax extenders that NSBA deems most important to small businesses. These provisions are included in H.R. 5771.
The Joint Committee on Taxation (JCT) estimated that H.R. 5771 would reduce revenues by $44.7 billion from fiscal 2015 through fiscal 2024.
Meanwhile, an omnibus spending package funding the government through next September is expected to hit the House floor next week, thus completing the current lame duck session of Congress. Lawmakers have a very tight timetable to negotiate a year-end spending package and get it through both chambers before current funds expire on Dec. 11.
House Republican leaders are eager to avoid a shutdown or another stopgap by moving a broad funding package, while also finding a way to push back against the White House for its recent executive actions on immigration. Republicans are considering a proposal to fund the government through the remainder of the fiscal year, but sunset spending for immigration-related activities by a date in the near future.
This maneuver is called a “cromnibus” strategy, a combination of a long-term omnibus spending bill and a shorter-term continuing resolution (CR). The omnibus portion of the spending package would contain 11 appropriations bills that would fund most government agencies until next September. The only agency that would not be included in the omnibus would be the Department of Homeland Security. Republicans want to fund that department for a shorter period of time—through March 2015—to give the Republicans a better chance to block the administration’s immigration plans when the party controls both chambers of Congress next year.
Senate Majority Leader Harry Reid (D-Nev.) has indicated that he would be supportive of such an approach and would be open to bringing it to the Senate floor for consideration, if it passes the House.
However, the president still prefers Congress to pass a long-term funding bill, and it remains uncertain whether or not he would veto a cromnibus package that does not extending for the Homeland Security agency through September.