NGI The Weekly Gas Market Report / NGI All News Access

Reid Strips Tax Extenders From Senate Jobs Package

February 15, 2010
/ Print
| Share More
/ Text Size+

Senate Majority Leader Harry Reid (D-NV) stripped all of the tax extenders -- energy and otherwise -- from a pending jobs package only hours after Senate Finance Committee Chairman Max Baucus (D-MT) and Ranking Member Charles Grassley (R-IA) unveiled a bipartisan bill Thursday.

"The majority leader wants a slimmed-down jobs bill in the Senate," said Martin Edwards, vice president of legislative affairs for the Interstate Natural Gas Association of America, which represents interstate natural gas pipelines.

Reid took the action after "hearing from Democrats that they want to keep the bill focused on job creation rather than extraneous items," namely the extension of tax breaks, many of which expired at the end of 2009, he noted. Also Senate Minority Leader Mitch McConnell (R-KY) refused to endorse the Baucus-Grassley measure, The Hill newspaper reported.

The Baucus-Grassley bill, which had a price tag of $85 billion, sought to renew more than 40 energy and non energy tax breaks at a projected cost of $31 billion over a 10-year period.

Reid's gutting of the Baucus-Grassley jobs bill "doesn't send a very strong bipartisan signal," Edwards told NGI.

He believes it is premature to declare the tax extenders dead. "Somebody could offer an amendment [on the Senate floor] to bring the extenders back" when the Senate takes up the jobs package after it returns from its President's Day recess the week of Feb. 22.

Or the Senate could address the tax extenders in later legislation. "Sen. Reid indicated the Senate would move to tax extenders legislation and other elements that were bolted onto the draft jobs bill...after it disposes of a slimmed-down jobs bill," said energy analyst Mark McMinimy of Concept Capital's Washington Research Group.

In his State of the Union address last month President Obama said a jobs bill was a priority of his. "The House has passed a jobs bill...As the first order of business this year, I urge the Senate to do the same...I want a jobs bill on my desk without delay," he said (see NGI, Feb. 1). The House passed a $154 billion jobs package in December.

Several key energy tax extenders were included in the Baucus-Grassley jobs package. It would have extended until Jan. 1, 2011 the suspension of limitation on percentage depletion for oil and natural gas from marginal wells; a special rule for the sales or dispositions to implement Federal Energy Regulatory Commission or state electricity restructuring policy for qualified electric utilities; excise tax credits and outlay payments for alternative fuel and alternative fuel mixtures; a credit for electricity produced at certain open-loop biomass facilities; and an energy efficient home credit.

Independent producers are most interested in the one-year suspension of the percentage depletion for oil and gas from marginal wells, said Lee Fuller, vice president of government relations for the Independent Petroleum Association of America. "I'm hopeful that it will either come back" later in a tax extenders package, or that the Democrats and Republicans "will work their way through their differences of opinion" in the current jobs package, he said.

©Copyright 2010 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.

ISSN © 2577-9877 | ISSN © 1532-1266
Comments powered by Disqus