Justice and Mental Health Collaboration Act of 2013—Motion to Proceedby Senator Chuck Grassley
Posted on 2014-05-15
GRASSLEY. Mr. President, I am glad the Senate is finally getting
serious about passing tax extenders this year. Congress has put off the
extension of the expired tax provisions until the last minute all too
frequently. In 2012 provisions remained expired for an entire year
before finally being extended in January of 2013. Similarly, the
previous extension of the expired provisions did not occur until the
middle of December. Such late action by Congress results in
complications come filing season for taxpayers, particularly for people
who hire tax preparers; tax forms are not ready and as a result refunds
are delayed. So we owe it to our constituents to see to it that these
added complications are not a factor this year. Tax season is
unpleasant enough without our adding to it by failing to do our job in
a timely fashion.
Already, by allowing these tax provisions to expire for more than 5 months, we have created a lot of headaches and uncertainty for individuals and businesses. The current expiration causes headaches for teachers purchasing school supplies, college students paying for higher education, and seniors making charitable donations from their IRAs. Those are only 3 of some 53 provisions we are considering extending. These should have been extended 4 months ago.
Furthermore, it creates uncertainty for businesses, which harms investment and business growth. The enhanced expensing rules under section 179 are of particular importance to small businesses and farmers. I regularly hear from my constituents who are putting off purchasing a new truck or tractor for their business operation because they do not know the fate of that provision. This is bad for economic growth, and it obviously has something to do with us having a high unemployment rate and jobs not being created.
The lapse of renewable energy incentives has already created a lot of uncertainty and slow growth in the renewable industry. This serves only to hamper the strides made toward a viable self-sustainable renewable energy and fuel sector.
I am aware that some of my colleagues have expressed extreme opposition to some of the provisions in the package. I would like to specifically respond to claims that some of my colleagues have made about wind energy and the wind production tax credit.
I am sympathetic to the argument that the Tax Code has gotten too cluttered with too many special interest provisions. That is the reason many of us for a long period of time have been clamoring for tax reform. But just because we haven't cleaned up the Tax Code in a comprehensive way doesn't mean we should pull the rug out from under domestic renewable energy producers. Doing so would cost jobs, harm our economy, harm the environment, and even enhance problems for national security.
I am glad to defend the wind production tax credit and wind energy. Wind energy provides more than 4 percent of U.S. electricity, supports 80,000 American jobs, spurred $105 billion in private investment in the United States just since 2005, and that source of energy displaces more expensive and more polluting sources of energy, lowering electricity prices for consumers.
More than 70 percent of U.S. wind turbine value is now produced right here in the United States, compared to just 25 percent prior to 2005. More than 550 industrial facilities across 44 States manufacture for the wind energy industry. The wind industry today supports 80,000 American jobs. The tax incentive has spurred $105 billion in private investment in the United States since 2005.
Opponents of the renewable energy provisions want to have this debate in a vacuum. They disregard the many incentives and subsidies that exist for other sources of energy and are permanent law, but they don't seem to talk about those much.
For example, the 100-year-old oil and gas industry continues to benefit from tax preferences that benefit only their industry. These are not general business tax provisions, as we are led to believe, no different from what other industries have. These are specific to the oil and gas business, the same way a wind energy tax credit is specific to wind. I will give a few examples of these tax provisions: expensing for intangible drilling costs, deductions for tertiary injectants, percentage depletion for oil wells, and special amortization for geological costs. These four tax preferences for this single industry result in the loss of more than $4 billion annually in tax revenue.
Nuclear energy would be another example--in fact, a very great example. The first nuclear powerplant came online in the United States in 1958--56 years ago. Nuclear receives special tax treatment for interest from decommissioning trust funds. Congress created a production tax credit for this mature industry in 2005, and that production tax credit is going to be available until 2020. Nuclear also benefits from the Price-Anderson Federal liability insurance provisions. Congress provided that as a temporary measure in 1958, but it is still here and it was renewed, as I said, through 2025. Nuclear energy has also received $74 billion in Federal research and development dollars since 1950.
Are these crony capitalist handouts? I haven't heard it from the same colleagues who talk about wind energy. Is it time to end market distortion for nuclear power? I haven't heard my colleagues talk about that.
A Cato study found that ``in truth, nuclear power has never made economic sense and exists purely as a creature of government.'' There is also no truth to the claim that wind energy is somehow undercutting baseload power. Baseload nuclear and coal energy are being harmed by cheap natural gas, transmission congestion, and stagnant electricity demand.
The chairman and CEO of NextEra Energy James Robo addressed this issue in an op-ed recently. NextEra operates significant wind generation but also a large nuclear operation. He stated: We do not merely advocate for an ``all-of-the-above'' energy strategy--we live it. And from our perspective, nuclear plants in competitive markets are not challenged by wind energy but by low natural gas prices caused by the shale gas revolution.
Blaming the wind industry for the challenges in the merchant nuclear business may be politically expedient, but it will not help any company or technology operate more successfully in a low natural gas price environment.
Wind energy and its incentives are not to blame for the market conditions affecting the economics of nuclear energy.
So I would ask my colleagues a very simple question: Why is repealing a subsidy for oil and gas or nuclear energy a tax increase on energy producers and consumers, while repealing an incentive for alternative or renewable energy is not? It is not intellectually honest.
I authored the wind energy incentive in 1992. We know there is no justification for it to go on forever. It was never meant to, and it shouldn't. I am happy to discuss a responsible multiyear phaseout of the wind tax [[Page S3051]] credit. In 2012 the wind industry was the only industry to put forward a phaseout plan. But any phaseout must be done in the context of comprehensive tax reform where all energy tax provisions are on the table at the same time. It should be done responsibly over a few years to provide certainty and ensure a viable industry.
Thank God Chairman Wyden has expressed his determination that this will be the last tax extenders bill prior to comprehensive tax reform. I share Senator Wyden's sentiment in favor of putting an end to the annual kabuki dance that is what we call tax extenders, the bill before the Senate we are going to be voting on shortly. Good tax policy requires certainty that can only come from long-term predictable tax policy. Businesses need certainty in the Tax Code so that they can plan and invest accordingly. Moreover, taxpayers deserve to know that the Tax Code is not just being used for another way to dole out funds to politically favored groups. However, the only sound way to reach this goal is through comprehensive tax reform, and Senator Wyden, as chairman of the Finance Committee, can make that happen, and he said he is going to.
I agree that there are provisions in extenders that ultimately should be left on the cutting-room floor, but it is in a tax reform environment where we should consider the relative merits of individual provisions.
Targeting certain provisions for elimination now makes little sense for those of us who want to reduce tax rates as much as possible. Tax reform provides an opportunity to use a realistic baseline that will allow the revenue generated from cutting back provisions to be used to pay for reductions in individual and corporate tax rates.
I look forward to working with my colleagues in the future to enact that tax reform and put an end to the headaches and uncertainty created by the regular expiration of the tax provisions we are considering right now on the Senate floor. Right now our focus must be on extending current expired or expiring provisions that will end up giving us room in the baseline--the baseline CBO always talks about--to work toward that goal of tax reform.
It is my hope that we can move quickly to reach a bipartisan agreement in the Senate and come to a timely agreement with the House. Taxpayers should not have to wait until December or January for us to act.
I yield the floor.
The ACTING PRESIDENT pro tempore. The Senator from Virginia.