Schumer: Dems have the votes to pass tax extenders legislation

Sen. Charles Schumer (D-N.Y.) on Tuesday said his chamber will have the 60 votes needed to pass the so-called tax extenders bill introduced by Senate Finance Chairman Max Baucus (D-Mont.). 

“We will have the 60 votes needed to pass this bill,” he said, predicting that final passage would likely come next week. 

The Senate extenders bill differs from the House-passed version by going easier on taxing “carried interest.” However, income from the sale of investment partnerships would still be taxed as ordinary income, as in the House proposal. 

Schumer was uncertain if changes to carried interest would be accepted in the House.

The Senate bill also provides a six-month extension to federal assistance to states to help pay their Medicaid costs, which was not included in the House bill. 

“Additional Federal Medicaid match money, known as FMAP, helps the economy grow,” Baucus said. “According to the economist Mark Zandi, this funding has a return on investments of about $1.40 for every dollar invested.” 

Like the House legislation, the Senate bill resuscitates several individual and business tax breaks that expired last year. It includes measures like a deduction for teachers who buy school supplies and a research and development tax credit for businesses. 

“The bill would also extend important energy tax incentives,” Baucus said. “For example, the bill would extend the dollar-per-gallon credit for biodiesel and renewable diesel. And the bill would extend the manufacturer’s credit for the construction of new energy-efficient homes.”

Despite the changes, U.S. multinational corporations are as opposed to the Senate legislation as
they were to the House bill, mainly because both proposals limit the use of foreign tax credits,
which they say will hurt their ability to compete internationally.

The bill also raises the per-barrel tax that finances the Oil Spill Liability Trust Fund to 41 cents, which is expected to raise $14 billion over 10 years.