The roller coaster ride on Capitol Hill continued during Thanksgiving week, as House Ways and Means Committee Chairman Dave Camp (R-Mich.) and Senate Majority Leader Harry Reid (D-Nev.) announced a deal on tax extenders package. However, it was quickly derailed by an Obama administration veto threat.
The compromise proposal would permanently increase Sec. 179 expensing levels starting in 2014 and reinstate 50 percent bonus depreciation for equipment purchases for 2014 and 2015, along with extending numerous business-supported expired tax provisions. Just as Washington’s tax policy analysts were digesting the welcome news, President Obama and key Democrats announced opposition to the compromise, citing the business-friendly nature of the package and the lack of attention to “working families.”
Republicans, with a strengthened majority in Congress next year including Senate control, are less willing to compromise and more likely to delay tax extenders consideration until early next year. Nonetheless, there is support for retroactively reinstating all expired tax extenders for 2014 during the lame duck to avoid complicating the year’s tax filings. The House is poised to vote on such a proposal in the coming days.
Meanwhile, a continuing resolution (CR) to fund the federal government into next year was also in flux. Lawmakers were making steady progress on a plan to keep the federal government open until next fall– until President Obama’s announced his immigration executive order. Republicans are apoplectic about what they see as a presidential power grab and many want to use the CR to clip the administration’s wings.
