Led by GOP, House nears OK of renewing $600B in tax cuts

WASHINGTON (AP) — Republicans pushed a year-end tax-cut compromise toward House passage Thursday as Congress prepared to finish 2015 with a flurry of accomplishment and await the partisan collisions sure to dominate the coming election year.

House Democratic leader Nancy Pelosi of California was leading a charge against the tax measure, but GOP leaders seemed certain to prevail. That would set the stage for passage Friday of a companion bill providing $1.1 trillion to finance government in 2016, leaving only Senate action before the 2,200-page bundle goes to President Barack Obama.

“If you can’t find something you don’t agree with in the bill, you must not be looking hard enough,” said Rep. Tom Cole, R-Okla. He said it was “a compromise and a reflection of divided government.”

The tax bill would mostly renew scores of existing breaks that have lapsed or are about to, but its scope was impressive, with victories for both parties. Even so, Democrats complained that 60 percent of the permanent reductions would go to business and just 40 percent to families.

“Middle-class wages are stagnant or in decline,” said Rep. Rose DeLauro, D-Conn., an argument that Democrats are sure to press in the 2016 campaigns. “We need to do whatever we can to support working people.”

Tax credits for college expenses, child costs and lower-earning families are set to become permanent, as would cuts for companies that do research or buy equipment. The measure would make permanent or at least extend reductions for some charitable contributions, builders of energy-efficient homes, producers of Puerto Rican and Virgin Islands rum and owners of auto race tracks.

Coupled with tax provisions that House leaders stuffed into the spending bill to attract votes, the legislation would cost the government an estimated $680 billion over the next decade. That would pump federal deficits over that period, already projected to total an astronomical $7 trillion, even higher.

“It’s a significant tax relief measure and of course you know how Republicans like to cut taxes,” Senate Majority Leader Mitch McConnell, R-Ky., told The Associated Press.

As if they needed more encouragement, Republicans said the tax bill would make revamping tax laws next year easier by clearing away those extensions now. GOP leaders hope to produce tax and health care overhaul measures next year, fully expecting vetoes from a Democratic president but savoring the campaign-season opportunity to fire up conservative voters.

Though Pelosi was opposing the tax measure, Democrats were divided over the overall budget deal.

Senate Minority Leader Harry Reid, D-Nev., said the budget agreement was “a good compromise.” The White House, in a letter expressing support, said the deal would “help to grow the economy and build middle-class economic security.”

Tucked into the two bills were provisions trimming some of the taxes that help pay for Obama’s prized 2010 health care overhaul. The White House opposed the rollbacks, but Republicans and many Democrats savored them. A tax on medical devices would be suspended for two years, a levy on health insurers would stop for one year and, in a victory for unions, a tax on higher-cost insurance policies would be postponed two years until 2020.

Democrats failed to block GOP language restricting federal reimbursements to insurers losing money on federal and state exchanges where people buy coverage. Many say that’s helped destabilize some markets.

Republicans won an end of the four-decade ban on U.S. crude oil exports. The industry said lifting that prohibition would create jobs and lower gasoline prices — outcomes that opponents said were flat-out wrong.

In exchange, Democrats secured extensions of tax breaks for alternative power sources such as solar and wind energy.

The tax bill also takes a shot at the Internal Revenue Service, which Republicans have not forgiven following its admission that it subjected conservative groups seeking tax-exempt status to unfairly tough investigations. The measure would make it easier for people to get information from the IRS about their cases and for groups to appeal agency decisions against them.


AP Congressional Correspondent Erica Werner and Associated Press writers Stephen Ohlemacher, Andrew Taylor, Mary Clare Jalonick and Matthew Daly contributed to this report.


Categories: Politics