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'Extenders' tax breaks renewal expected in U.S. House

Published 12/03/2014, 12:24 PM
'Extenders' tax breaks renewal expected in U.S. House

By Kevin Drawbaugh

WASHINGTON (Reuters) - Dozens of special-interest tax breaks would be renewed under a bill expected to win U.S. House of Representatives approval on Wednesday, in a move to let taxpayers claim the tax breaks for 2014 while kicking a broader debate about them into 2015.

Known as the "extenders" package, the temporary tax breaks, affecting a wide range of corporations and ordinary Americans, have been in limbo since they expired at the end of 2013.

Republicans, who control the House, laid out a plan on Tuesday to renew the extenders retroactively to the beginning of 2014, but only up to the end of this year.

If the Democratic-controlled Senate approves this approach, which aides said was probable, Congress will have to deal with the extenders again next year, continuing a pattern of annually reconsidering them.

A short-term extenders renewal would mark a tactical retreat by House Republicans. For months, some of them have been trying to make certain business-related extender provisions permanent, including one for corporate research costs, for instance.

A tentative bipartisan deal along those lines collapsed last week after the White House issued a veto threat. Some Democrats said they and President Barack Obama viewed the deal as too costly and too slanted in favor of business interests.

Some analysts said there was still a chance the Senate might seek a broader extenders agreement, but that was a long shot with less than a week remaining before Congress adjourns for the December holidays with other pressing issues on the agenda.

Next year, Republicans will control both the House and Senate, improving their chances of reshaping the extenders package, viewed by both parties as emblematic of a broken, loophole-riddled U.S. tax code that badly needs reform.

As the roughly 55-item extenders package stands now, if it were renewed and left in place, it would add an estimated $45 billion to the federal deficit over 10 years.

The package includes some widely used tax breaks, such as the one for corporate research and one that lets corporations write off costs of new capital and equipment investments.

The extenders also include tax breaks for school teachers' supply costs, college tuition, mass transit commuters, charitable contributions and alternative energy.

But the package also has narrow provisions that are often criticized, such as tax breaks for NASCAR race tracks, Puerto Rican rum producers, racehorse owners and Hollywood studios.

(Reporting by Kevin Drawbaugh; Editing by Will Dunham)

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