WASHINGTON – The clock is ticking as Congress remains gridlocked over the renewal of federal tax credits for investments in alternative energy.
The House and Senate passed competing revisions of the energy tax credits last week. With only three months left before they expire, the energy credits are hostages in a larger battle over federal tax policy – and congressional prerogatives.
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The Senate voted 93-2 on Sept. 23 to approve a $68 billion tax bill that includes the energy credits, along with hurricane relief and a patch to exempt some taxpayers from the alternative minimum tax. Senators said the measure is a delicate compromise, and warn that it is the only bill that is likely to pass. The White House has also expressed support for it.
“Not only would the legislation help families save on their energy bills, but it would also create green jobs for thousands of Americans and lessen our dependence on foreign oil,” U.S. Sen. Jack Reed, D-R.I., said in a statement. “These clean energy tax credits are vital to spurring the development of alternative energy and providing consumers with the tools and incentives they need to make their homes and businesses more energy efficient.”
On Friday, however, the House voted 257-166 to approve its own $60 billion tax bill, which differs in some details from the Senate version and, more importantly, raises other taxes to make it revenue neutral.
The White House and some Republicans are opposed to the plan, and Senate Majority Leader Harry Reid, D-Nev., warned the House that it had to pass the Senate bill if it wanted it to become law.
Those comments led U.S. Rep. Charles Rangel, D-N.Y. and the chairman of the tax-writing committee, to accuse Reid and his colleagues of “arrogance.” However, Rangel also said the $15 billion energy section of the House bill is “not controversial,” according to Bloomberg News.
Alternative energy entrepreneurs have been warning for months that failure to continue the tax credits will cripple the U.S. alternative-energy industry, which has expanded rapidly in recent years in the face of high oil prices and environmental concerns.
If that were to happen, history would be repeating itself.
When Congress allowed solar-energy tax credits to expire in the 1980s, the industry withered. Congress failed to renew similar credits in 1999, 2001, and 2003, as well, and the Department of Energy reported an immediate decline in wind-power development.
A list of the renewable energy and efficiency tax incentives available in Rhode Island is online at the Database of State Incentives for Renewables & Efficiency, which is maintained by the North Carolina Solar Center at North Carolina State University.
