Protecting Volunteer Firefighters and Emergency Responders Act of 2014

Floor Speech

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TAX EXTENDERS

Mr. GRASSLEY. Mr. President, this week it seems that the Senate is finally ready to take up and pass a tax extenders bill. Congress' procrastination on tax extenders has been causing a lot of headaches and indigestion to many of my constituents back home in Iowa.

Small business owners and farmers want to know whether the enhanced expensing rules under section 179 will be extended so that they can invest in new machinery. Retirees want to know whether they can make a charitable donation from their IRA to meet their required minimum distribution. The renewable energy sector wants to know what investments they should make to increase production.

The Senate could have made strides towards answering these questions just this past spring. The Finance Committee acted in a bipartisan fashion to report an extenders package to the floor that would have extended all expiring provisions for 2 years. By all accounts, this package could have been passed by the Senate with broad support on both sides of the aisle.

Unfortunately, movement of this package in the Senate stalled in May due to procedural maneuvering on the Senate floor. That maneuvering was meant to prevent votes on all amendments--even those with broad, bipartisan support. With the Senate failing to take action, the hopes of getting the extenders done in a timely fashion faded last spring.

However, there were high hopes that a bipartisan deal could be worked out with the House that could provide individuals and businesses much-needed tax certainty. Before Thanksgiving, House and Senate negotiators were making real headway towards a bipartisan agreement that would have extended most provisions for 2 years and made several provisions permanent. The President then thwarted negotiations by threatening to veto that package before it was even finalized.

Why the President would threaten to veto a package that, by all accounts, recognized bipartisan priorities as well as priorities of the administration is beyond me. The President's stated complaint is that the deal was geared too heavily toward business. From an administration that has regularly been advocating business-only tax reform, this complaint rings hollow.

However, all of the business provisions that would have been made permanent under the proposed deal have had strong support from both sides of the aisle here in the Senate as well as from the White House. For instance, the President's fiscal package that was in the 2015 budget calls for both the research and development tax credit and the enhanced expensing rules under Section 179 to be made permanent.

The bipartisan deal would have accomplished this. The proposed deal also
included priorities specific to President Obama and many of my Democratic colleagues. For instance, the American opportunity tax credit enacted as part of the President's 2009 stimulus bill would have been made permanent. The President's other named priorities were the enhanced refundable child tax credit and the earned-income tax credit. But it was the President's own actions on immigration--using presidential edict--that made their inclusion a very tough sell. Many on my side of the aisle have long had concerns about fraud and abuse in both of these credits. The President's Executive action only served to enhance these concerns and added fuel to the fire by eroding established policy that prohibits undocumented immigrants from receiving their earned-income credit.

The President may have a phone and a pen. He says he has it, and it seems as if he is always using it. But the last time I checked, Congress is still a coequal branch of government under the Constitution. When the President acts unilaterally, it should not surprise him when Congress responds.

So it is true that the deal did not include everything the President wanted, but it didn't include everything Republicans wanted either. Nobody ever gets everything they want in bipartisan negotiations. The point of negotiating is to get something the majority of us can support.

By cutting off negotiations, the White House has left us with voting on something that is barely better than nothing for individuals and industries. This includes industries the President claims to be a priority of his, such as the renewable energy sector, which is very much a high priority for me.

Forward policy guidance is critically important to the renewable energy sector. The proposed deal would have provided certainty to wind energy through a multiyear phaseout that would have provided a glidepath to self-sustainability. Other renewable provisions would have been extended for 2 years. Instead, Congress is now faced with settling for a 1-year retroactive extension that fails to provide any meaningful incentive for the further development of renewable energy.

It also fails to provide certainty to other businesses and to individuals as well. These are provisions that will once again expire almost as soon as they go into law. I think we all agree that making tax law 1 year at a time in retroactive fashion is not the way to do business. Yet that is the reality we currently face because of this administration's refusal to compromise.

While I would prefer longer extensions of these provisions, that is no longer a viable option as we close down this Congress. As a result, I intend to support the House package. My only hope is that in the new Congress we can make strides toward putting some certainty back into the Tax Code.

I yield the floor.

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