House “Extenders” Bills Represent First Wave of Effort to Enact Costly, Permanent Tax Cuts

Source: Chuck Marr and Brandon DeBot, Center on Budget and Policy Priorities, February 10, 2015

From the summary:
House leaders plan to schedule votes this week on seven bills recently approved by the Ways and Means Committee to make permanent an array of “tax extenders,” a set of primarily corporate tax provisions that policymakers routinely extend for a year or two at a time. The seven measures, which will likely be packaged into a smaller number of bills for floor consideration, are the first installment in a series of bills that House leaders are expected to move to make many of the largest tax extenders permanent, while offsetting none of the cost.

This approach isn’t fiscally responsible. It also places extending corporate tax breaks above extending key provisions of the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC) that benefit tens of millions of low- and middle-income working families (and are slated to expire at the end of 2017). For these reasons, the President and many House members opposed an effort last fall to make the extenders permanent without paying for them. The action now underway in the House is a reprise of that effort.

….Many lawmakers may support making particular extender provisions permanent on policy grounds. They should recognize, however, that doing so now without offsetting the costs would (and is designed to) open the door for other, more costly extenders — most of them corporate tax breaks — also to be made permanent.

Moreover, this approach stands in sharp contrast to the bipartisan understanding (which GOP leaders insist upon) that any easing of sequestration to avert damaging cuts in economically important areas like education and training, basic scientific research, and infrastructure must be fully paid for — or else it won’t pass. The extenders should not be granted a more generous fiscal standard.
In short, the House leadership’s approach represents both ill-advised fiscal policy and misguided priorities.