Hill Heat

House Democrats last night added funding for rural counties to tax policy bills as part of an effort to end an impasse with the Senate that is jeopardizing extension of expiring renewable energy tax credits. But the Senate’s top tax writer quickly called the House proposal inadequate, leaving unresolved a standoff that has delayed billions of dollars in incentives for alternative power, energy-efficient buildings and other technologies.

The House may vote as soon as today on two separate tax policy bills. The first (H.R. 7201) is a roughly $14 billion package of energy provisions that mirrors incentives the House approved last week. The second (H.R. 7202) is a much larger package of business and personal credits that now includes a reauthorization through 2009 of the Secure Rural Schools program that aids counties hurt by declining timber sales on federal lands. It also now funds the Payment In Lieu of Taxes program for 2009, and the total cost for the two rural provisions combined is estimated at $1 billion over a decade. The Senate has approved a longer extension of these programs at a cost of roughly $3.3 billion.

Last week, the House voted on the energy and non-energy extenders together as one bill. While Oregon lawmakers have pushed the House to include the county funding, this and other changes to the House plan do not appear to have appeased senators who say their year-end tax package is the only one that can win the needed 60 votes. Senate Democrats say their bill is a carefully negotiated compromise with Republicans who in many cases oppose offsets for tax incentives.

But top House Democrats continued to bristle at calls to simply accept the Senate’s bill. “At the end of the day, I think what we are finding is this whole concept of having two bodies constitute the Congress – the House and the Senate – is actually being shattered,” Ways and Means Chairman Charles Rangel (D-N.Y.) said last night.