Tax Cut Horsetrading Likely to Pay Dividends for Alternative Fuels
As the Senate bill to extend a series of Bush-era tax cuts passed its first procedural vote on Monday, 83-15, details began to emerge of add-ons to the bill that President Obama and his Republican negotiating partners may be forced to accept if they hope to beat the December 31, 2010 deadline for extension.
Among the possible green energy and transportation provisions in the bill:
- The extension of federal incentives for the purchase and installation of electric vehicle charging stations. Originally created under 2009′s American Recovery and Reinvestment Act, the 50 percent tax credit was inexplicably scheduled to expire at the end of this year—just as the first wave of modern electric vehicles are being delivered.
- A one-year extension of $7 billion per year in ethanol subsides, including a 45-cent per gallon producers credit and a 10-cent per gallon supplemental “small producers credit.” The amendment would also extend a 45-cent per gallon tariff that has effectively served to bar foreign ethanol from the American market.
- An proposed amendment to extend the Alternative Motor Vehicle Credit “for certain hybrids,” which likely refers to medium and heavy duty hybrids designed for commercial use—though details of the provisions have not been released and it’s not clear that leadership will allow the bill to the floor for a vote.
- A range of energy incentives and grants, including an energy efficient home credit, and adjustments to how way clean energy subsidies are paid out to utilities and municipalities.
- Incentives for biodiesel and renewable diesel.
According to Politico, the 27 amendments that are currently up for consideration are targeted mostly toward appeasing congressional Democrats, many of whom have been critical of the administration’s decision to capitulate on the extension of lucrative tax cuts for the wealthiest Americans.
The bill’s estimated $858 billion price tag also creates political problems for Capitol Hill’s numerous, born-again deficit hawks, but many analysts predict that weak opposition to the law in the Senate—coupled with a litany of giveaways to popular line item causes like ethanol—should generate enough support from Democrats in the House to ensure passage.
So which amendments will make it to the President’s desk? It’s likely that nobody will know for sure until all of the sausage is in its casings and ready to ship.