* Senate Finance panel to review deal on Thursday
* Tax credit for wind energy excluded from draft
* Final action will likely wait until December
By Kim Dixon and Roberta Rampton
WASHINGTON, Aug 1 In a rare bipartisan pact, a
group of U.S. senators clinched a tentative deal on Wednesday to
renew dozens of business tax breaks that have expired or will
lapse at year-end.
Crafted by Democrats and Republicans on the Senate Finance
Committee, the plan would also prevent the alternative minimum
tax, intended to ensure the rich pay some taxes, from creeping
into the tax bite on the middle class.
"This effort has proven that legislating can still be done
if both sides work together," Senator Max Baucus, the
committee's Democratic chairman, said.
Lawmakers trimmed almost a quarter of the tax breaks in the
$152 billion bill, including a tax credit the wind energy
industry has argued is critical.
In a potential hurdle, conservative Republican Senator Tom
Coburn late on Thursday threatened to hold up the bill if it was
not trimmed further, but he is working with Baucus to resolve
The deal must still be reconciled with competing demands in
the Republican-controlled House of Representatives, but a
bipartisan agreement in the Senate is notable progress.
Some of the $6 billion in energy tax breaks are more
controversial among Republican House conservatives, who might
not agree to extending the tax breaks without offsetting
The tax breaks are among the items Congress faces before the
end of the year, though a final deal is unlikely before the Nov.
6 presidential and congressional elections.
This group of provisions is known as the "tax extenders"
because they expire every year and typically are extended.
They represent some of the fiscal policy issues converging
at the end of 2012 in what is being called the "fiscal cliff."
It includes hundreds of billions of dollars in expiring income
tax cuts and automatic federal spending cuts.
Big companies will likely cheer the extenders deal, with
many benefiting from the popular research and development tax
credit, one of the biggest in the package at a cost of about $15
billion, according to the congressional Joint Committee on
Also included in the deal is renewal and extension of a tax
break for banks and other financial institutions, and individual
tax deductions for state and local taxes, for teachers and users
of mass transit. The panel will work on the draft legislation,
and possibly vote on it, on Thursday.
A draft of the legislation can be found here:
WIND TAX CREDIT LEFT OUT
Left out of the deal is a 2.1-cents per kilowatt-hour
production tax credit for wind energy, a tax break that the
industry says is essential to developing more wind farms and
supporting jobs at wind manufacturing plants.
The production tax credit could be added as an amendment to
the draft legislation, Whitney Stanco, an energy policy analyst
with Guggenheim Partners, said in an email to clients.
"The wind production credit is a priority for Chairman
Baucus and he will continue to fight for it as the process
continues," a Baucus spokesman said.
Democratic President Barack Obama has urged Congress to
extend the credit, which has support from Republicans in states
that are home to wind farms and manufacturing plants, such as
Iowa and South Dakota.
But some Republicans have argued that the industry should be
able to stand on its own. Republican presidential candidate Mitt
Romney favors letting the credit expire, a campaign spokesman
told the Des Moines Register earlier this week.
The head of the world's biggest wind turbine maker, Vestas
, has said that the U.S. wind turbine market is likely
to fall by 80 percent next year if the credit expires.
The decision is also being closely watched by manufacturers
such as U.S. conglomerate GE, Germany's Siemens
, Spain's Gamesa and India's Suzlon