Lawmakers Eye Tax Bill as Vehicle for Trade in Lame-Duck, Says NFTC's Reinsch
Capitol Hill trade supporters and industry stakeholders may be increasingly looking to tax extender legislation as a vehicle for trade bills in the lame-duck session, said National Foreign Trade Council President Bill Reinsch at an NFTC roundtable on Nov. 14. But lingering congressional concerns over some of those bills are poised to impede efforts to build a small trade package around extenders, said Reinsch. A moratorium on earmarks has held up movement on the Miscellaneous Tariff Bill since its expiration at the end of 2012. The Generalized System of Preferences still faces funding hurdles in the Senate.
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The tax extenders bill is a collection of roughly 50 tax breaks. Some on the Hill are pushing for a one-year extension of the tax extender package, while other lawmakers want longer term, some indefinite, extensions. The number of exemptions is still in flux, with Democrats pushing for renewable energy exemptions and some Republicans resisting.
Pro-business supporters of the bill are confident it will pass in lame-duck session, although the size of the legislation and sensitive exemptions may hamper progress, said NFTC Vice President for Tax Policy Cathy Schultz. Reinsch countered that trade operatives on the Hill think extenders may be a “flawed vehicle” because discord on the bill may kill it in the end. “Other people think it’s the only train leaving the station, so we need to, you know, climb aboard,” said Reinsch. “There isn’t any consensus on that.” The Finance and Ways and Means committees have only held preliminary talks so far on a tax extenders bill, said Schultz.
Outgoing Finance Committee Chairman Ron Wyden, D-Ore., rejected the idea of adding trade legislation to tax extenders in the spring when the Senate was mulling a tax extender bill passed through the House. Sen. Kay Hagan, D-N.C., tacked on an amendment to that bill that would have altered but extended a Nicaragua tariff preference level program in the Central American Free Trade Agreement (see 14051528). The bill ultimately lost steam. Hagan lost her reelection bid in the Republican midterm landslide that handed the GOP the Senate. Finance ranking member Orrin Hatch, R-Utah, will take the reins of the committee once the new Congress takes its seat in January.
Pessimism and uncertainty surrounding Trade Promotion Authority’s advance through the legislative process is pushing lawmakers and stakeholders to seek alternative routes to pass trade legislation, said Reinsch, echoing a growing concern. Trade stalwarts have targeted TPA as the flagship item in a large omnibus package for more than a year. Since a bipartisan group of lawmakers introduced TPA legislation in both chambers of Congress in January, Democrats have repeatedly shot down the bill. Now hardline Democratic critics in the House argue the White House does not have enough support in Congress to pass the bill or one similar to it, but the exact level of congressional support for the January bill is unclear (see 1411120045).
After taking over the Finance Committee from now Ambassador to China, former Sen. Max Baucus, Wyden pledged in April to introduce an alternate version of TPA (see 14040919). His staff has since been tight-lipped about his priorities for the bill, but Reinsch said at the event Wyden has been reaching out to Democratic committee members to gauge their support and preferences for changes to the legislation. Some trade analysts said his last-ditch effort to convey his priorities to colleagues before the mid-terms will not have much impact on debate surrounding the bill (see 14040919).
Hatch said in a brief interview on Nov. 13 he wants to “look at” Wyden’s views on TPA, but also insisted the January TPA bill, which he co-sponsored, is the best option on the table. “We have a bill,” said Hatch. “The president should accept it. I think he will.” Republican Finance members Chuck Grassley and Pat Toomey also emphasized their support for TPA in brief interviews.
TPA is unlikely to pass in lame-duck, and no real movement on the bill will potentially take place until at least many weeks into 2015, said Reinsch. Before that, priority on the Hill will be given to “emergency” legislation only, he added. “I don’t think you should expect much substantive action on something like [TPA]…until March at the earliest,” said Reinsch.