Status of Tax Extenders Legislation
On May 8, the House of Representatives passed its first bill to extend one of the expired tax breaks. On May 15, however, the Senate failed to advance its broader bill. The Senate bill fell victim to a dispute that has bedeviled many bills during the past few years: whether the minority Republicans will be allowed to offer amendments to the bill. Majority Leader Harry Reid said no. Senator Ron Wyden, chairman of the Finance Committee, is continuing to seek a path forward to allow the Senate to consider the bill, but for now its prospects appear bleak, until much later in the year.
In the wake of the Senate’s failure to advance its bill, House leaders announced on May 16 that they had decided to postpone further consideration by the House of other tax extender bills until at least June.
With the Senate’s failure and the delay in House consideration of bills to extend more of the expired tax breaks, it is looking increasingly likely that Congress will wind up not considering the legislation and renewing the expired tax breaks until its lame duck session, after the November elections.
While most of the provisions are still likely to be renewed, the uncertainty surrounding which tax breaks will be renewed and for how long is likely to dampen economic activity and investment in coming months. The delay also means that businesses have more time to seek to influence the ultimate shape of the bill, but they should be doing that now and not waiting till the “lame duck” session.