Negotiators for a measure to extend some 50 tax provision continue to work toward agreement but Democrats remain concerned about the cost, which has been estimated to range between $700 billion and $800 billion.
A spokesperson for Senate Finance Committee ranking member Ron Wyden, D-Ore, who is involved in the negotiations, said in a memo to reporters that “there is a growing appetite to find a substantial and balanced deal. Congress has an opportunity here to provide greater economic certainty for working families, college students, charities, small business and enterprises on the forefront of innovation.”
House Minority Leader Nancy Pelosi, D-Calif., who is also involved in the negotiations, says she still considers the price tag too high. One reason Democrats are balking at the cost of the legislation is the fact that none of the package is paid for.
Another major sticking point is Republicans’ push to extend permanently the research and development credit and Code Sec. 179 expensing credit for small business. Democrats, including the White House, may be willing to accept making permanent those measures if they can get permanency for the earned income tax credit, the child tax credit, and the American Opportunity Tax Credit, according to congressional aides. Several Democrats have said they also support making the research and development provision permanent.
Negotiators are also considering making the deduction for state and local sales taxes permanent.
Some Democrats, including Pelosi, say that getting Republicans to agree to indexing the child tax credit (CTC) to inflation could grease the wheels in reaching an agreement. Republicans have said they would consider the indexing provision if they could get assurances that steps would be taken to prevent fraud, such as requiring Social Security numbers in order to claim the credit. Indexing the CTC, however, would add $70 billion to the cost of the package.
By Jeff Carlson, Wolters Kluwer News Staff