* New Senate Finance chairman unveils "tax extenders" bill
* Amendments likely after modest trimming of bipartisan bill
* Conclusive action unlikely until after November elections
(Adds Krueger, Udall, MacGuineas comments, background)
By Kevin Drawbaugh
April 1 The annual battle in the U.S. Congress
over renewing scores of temporary tax breaks, including the
corporate research tax credit and individual deductions for
teachers' supplies and college tuition costs, got under way on
In the Senate, the new chairman of the tax-writing Finance
Committee unveiled legislation that would modestly trim the list
of about 55 laws known as the "tax extenders" because they
expire every year or two and need to be regularly extended.
Oregon Democratic Senator Ron Wyden, who recently took over
the committee, scheduled a review-and-amendment session for
Thursday on the bipartisan bill that he is offering along with
Utah's Orrin Hatch, the committee's top Republican member.
"This pared-back bill demonstrates to the American people
that Congress can and will make the tough decisions needed to
help clean up our broken tax code," Hatch said in a statement.
Whether Congress can do that remains to be seen. Analysts
expect no conclusive action on tax extenders until after the
November mid-term congressional elections, with the likelihood
of comprehensive tax reform even more remote.
Most of the tax extenders technically expired at the end of
2013, leaving companies that depend on them in limbo. But this
happens regularly and the provisions are routinely approved on a
retroactive basis, a situation Wyden wants to end.
"I am determined this will be the last extenders bill on my
watch," he said in a statement.
70 PERCENT CHANCE SEEN
The extenders list is chock-full of special tax breaks for
businesses. Fighting to preserve them keeps hundreds of
corporate tax lobbyists busy across Washington, D.C.
Chris Krueger, a policy analyst at Guggenheim Partners,
forecast a 70 percent probability of the tax extenders being
renewed retroactively later this year, most likely in December.
A study by a left-leaning tax activist group on Monday said
that General Electric Corp alone employed 48 lobbyists
from January 2011 through September 2013 to work on the tax
extenders, in general, and one of them in particular - a
provision that lets multinationals shelter offshore financial
income from U.S. corporate income tax.
Citigroup employed 29 lobbyists over the same period
for the same purposes, said the report from Americans for Tax
Fairness, which is backed by unions and progressive groups.
A GE spokesman said on Monday the Americans for Tax Fairness
report distorted the facts and was "politically motivated."
The Wyden-Hatch legislation preserves the tax law known as
the active financing exception that so keenly concerns GE,
Citigroup and many other financial institutions, but the bill
drops a handful of other provisions.
Among these are tax breaks for wind energy production and
auto racing tracks, as well as the so-called look-through rule
of 2006, which corporations use to avoid corporate income tax on
transfers of capital between offshore units.
The lack of those provisions may make the Wyden-Hatch bill
look bold but the tax breaks could all be added back in through
the amendment process, which is set to being on Thursday.
Within hours of Wyden unveiling the bill, wind power
advocates were responding.
Colorado Democratic Senator Mark Udall said in a statement
he was "concerned" that Wyden-Hatch left out the production tax
credit for wind energy.
"I will keep fighting in Congress to ensure we keep the wind
at the backs of wind-energy companies in Colorado and across our
nation," Udall said.
With regards to the federal budget, deficit hawks complained
that Wyden-Hatch would cost $70 billion in lost government
revenues in 2014-2015 with no accompanying initiative to raise
an offsetting amount of new revenues.
"If Congress continues this irresponsible habit of extending
these tax cuts without offsets, they would add almost $850
billion, with interest, to our debt over the next decade," said
Maya MacGuineas, president of the Committee for a Responsible
Federal Budget, an anti-deficit activist group.
(Editing by Andrew Hay and Meredith Mazzilli)