Obama tax deal being larded up with special interest gifts to win Democrat congressional votes
The tax deal, reached behind the scenes and still informal, now includes ethanol subsidies for rural folks, commuter tax breaks for their cousins in the cities and suburbs and wind and solar grants for the environmentalists -- all aimed at winning votes, particularly from reluctant Democrats.
The holiday additions are being hung on the big bill that was Congress' main reason for spending December in Washington, long after the elections that will give Republicans new power in January. The measure will extend Bush-era tax cuts, averting big tax increases for nearly all Americans, and keep jobless benefits flowing.
Republicans generally liked that agreement, worked out by Obama and GOP leaders. Democrats generally didn't, hence the add-ons. . . .
Almost $5 billion in subsidies for corn-based ethanol and a continuing tariff to protect against ethanol imports were wrapped up and placed on the tree Thursday night for farm-state lawmakers and agribusiness lobbyists. Environmentalists won more grants for developers of renewable energy, like wind and solar.
For urban lawmakers, there's a continuation of about-to-expire tax breaks that could save commuters who use mass transit about $1,000 a year. Other popular tax provisions aimed at increasing production of hybrid automobiles, biodiesel fuel, coal and energy-efficient household appliances would be extended through the end of 2011 under the new add-ons.
The package also includes an extension of two Gulf Coast tax incentive programs enacted after Hurricane Katrina to spur economic development in Mississippi, Louisiana and Alabama.
The ethanol money was added despite a growing congressional opposition to subsidizing the fuel after decades of government support. Last month, 17 Republican and Democratic senators wrote to leaders calling the tax breaks "fiscally indefensible," since there's already a law in place that requires ethanol be blended into gasoline. . . .
Even if the pork may be aimed at Democrats, there are apparently a few Republicans who are quite happy with it. Senator Chuck Grassley is among them.
The Senate's tax bill will include a 45 cent-per-gallon ethanol tax credit for one more year, through the end of 2011, a spokesperson for Senator Chuck Grassley (R-IA) told Agriculture.com at Thursday evening.
The tax credit is in the draft of the tax extension bill the Senate is expected to vote on soon, said Beth Pellett Levine.
The law will also reinstate the $1 a gallon biodiesel tax credit, retroactively for 2010 and through 2011, she said. . . .