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Lame-Duck Tax Legislation Looks Likely, Aide and Lobbyists Say

Posted on August 11, 2016 by Stephen K. Cooper


Congress is likely to work on a noncontroversial continuing resolution (CR) without any tax provisions to fund the federal government when lawmakers return to Washington in September, while efforts to wrap up any pending tax legislation will likely wait until a lame-duck session, a Senate aide and tax lobbyists recently said.

Asked about the fall tax schedule, Senate Finance Committee Chair Orrin G. Hatch, R-Utah, was noncommittal, telling reporters before Congress left for the August recess, "We'll have to see, because I don't know what's really going to come up the rest of the year besides appropriations bills."

Finance Committee member John Thune, R-S.D., told reporters he wondered whether the taxwriting panel would be able to produce any tax vehicle this year. Thune noted that Hatch has focused his efforts on producing a corporate integration tax plan. Hatch has said his plan will be released for discussion purposes only.

Meanwhile, spending authority for the federal government expires at the end of fiscal 2016 on September 30, but lawmakers are expected to pass a short-term CR to keep the government open, a senior Senate GOP tax aide recently told Tax Analysts. The aide predicted that the bill would not include any tax riders.

Although there has been talk on Capitol Hill of adding section 48 renewable energy tax incentives to the CR, Congress is more likely to wait until a lame-duck session in November to work on a balanced, end-of-year tax package that also includes GOP-favored tax incentives for coal producers, the aide said.

That tax package could be added to an omnibus budget bill that wraps up all the unfinished appropriations measures that have not passed Congress yet, the aide said. Senate Majority Leader Mitch McConnell, R-Ky., "still has to decide," the aide said. "We may be able to clear technical corrections," the aide added, noting that Congress failed to add them to recent legislation reauthorizing the Federal Aviation Administration.

Tax lobbyists agreed that the lame-duck period holds more promise for passing a year-end tax extenders package, possibly hidden in the omnibus budget bill. That's especially true, one lobbyist said August 10, if Democrats win control of the Senate and Democratic presidential nominee Hillary Clinton is elected president.

Lawmakers from both parties have expressed interest in including energy tax provisions in a year-end bill, he said, adding that if Republican presidential nominee Donald Trump loses and drags down incumbent GOP senators, they will be free to pressure President Obama to pass tax policy.

"Losing would make them more likely to go out and get things done, without fear of losing their seats," the lobbyist said.

A second tax lobbyist said that energy tax incentive supporters will have to overcome hyper-political opposition from House Speaker Paul D. Ryan, R-Wis., and House Ways and Means Committee Chair Kevin Brady, R-Texas, during negotiations between the House and Senate. The lobbyist speculated that in return for renewable energy provisions, House leaders may request controversial budget riders or other spending concessions. "On the tax side, there's nothing that Republicans are itching to pass," the lobbyist said.

Follow Stephen K. Cooper (@ScoopOnTaxes) on Twitter for real-time updates.