May 13, 2014
Lindsey Held: 202-224-4515
Wyden Floor Statement Urging Support for the EXPIRE Act
The Senate today begins consideration of the EXPIRE Act. Why do we need to pass this bill now?
Because if the Senate doesn’t act, veterans who pack job fairs in cities across the country will face an even tougher struggle finding employment.
Because the jobs most essential to our economy – the good-paying innovation-driven jobs needed to underpin the middle class – will be harder to create.
Because just when underwater homeowners get hold of a life raft that keeps them in their homes, a big tax hit could yank it away.
Because millions of students already up to their eyeballs in debt will have to go even deeper.
And because producing clean energy will grow more expensive, risking high-tech jobs that Congress should be fighting to protect.
The EXPIRE Act addresses all of these issues – and more.
But what about the cycle of stop-and-go policies that makes the tax code so uncertain and complex? The EXPIRE Act ends it and builds a bridge to comprehensive tax reform. Many of these stop-and-go incentives are good policies that should be extended permanently. The EXPIRE Act gives the Finance Committee and Congress room to work on reform and decide which provisions to keep.
For now, this is about balancing short-term needs and long-term goals. In the coming months, the Finance Committee is going to pursue a tax reform plan that gives everybody a shot to get ahead. But this is the time to protect jobs and deliver certainty.
On April 3, the Finance Committee passed the “Expiring Provisions Improvement, Reform and Efficiency Act” with a strong bipartisan vote. This bill is called the EXPIRE Act for a simple reason: it’s supposed to expire. And I am committed that on my watch, this will be the last time the Finance Committee considers a tax extender bill. Once this bill is behind us, the committee will look to the next challenge – tax reform.
Let me talk for a moment about how this package will help middle-class individuals and families, because a thriving middle class is the key to broad-based economic growth in the United States.
The bill extends incentives that help get workers back on their feet, like the Work Opportunity Tax Credit. This provision is a life line for veterans in every state in the country, because it encourages employers to hire vets when they come home from overseas. Veteran unemployment is still at crisis levels, so this bill is critical.
Thanks to work by Senators Portman and Cardin, the Work Opportunity credit will be now available to businesses that hire the long-term unemployed. They’re the Americans who have been hit hardest by the recession, and without help, they could fall through the cracks. This bill can play an important role in helping these folks find good jobs.
The EXPIRE Act also extends and expands the credit for research and experimentation, because innovation is the lifeblood of the 21st century economy. Not only does this credit incentivize research and innovation, but, thanks to good, bipartisan work by Senators Roberts, Schumer, and others, we’ve made adjustments to it to make it work better for small businesses and start-up companies. Many of these firms are just starting out and can’t use the research credit in its current form. So what will the EXPIRE Act do? It says if start-ups want to use the credit to make it easier to hire and pay workers, they can do it.
Congress also needs to keep pushing business investment and innovation, which is why the EXPIRE Act extends incentives like bonus depreciation and expanded business expensing. This makes it easier for companies to invest in new equipment and property, grow their operations, and create more jobs.
Many American communities are struggling. They’ve been battered over the past decade by the financial crisis, a recession, and an exodus of manufacturing jobs. It’s important to drive investment to these communities to help promote economic growth and create good-paying jobs. The people in those communities deserve a chance to achieve the American dream just like anybody else.
That’s why the EXPIRE Act extends provisions like the New Markets Tax Credit, which drives private investment to these hard hit areas. The New Markets credit leverages private dollars to create new businesses in economically depressed areas. And thanks to efforts from my colleague from Ohio, Senator Brown, these credits will be available to boost manufacturing. Areas that have lost some of their good-paying, blue-collar industrial jobs will be able to get more private investment to help them grow more quickly.
With the recent news of the economy’s sluggish growth in the first quarter of this year, American families and businesses can use all the help they can get. That’s why the EXPIRE Act allows families to continue deducting their state and local sales taxes. Americans can already deduct their state income taxes thanks to a permanent part of the tax code. But families in places like Texas, Florida, Washington, and Alaska don’t pay state income taxes. They pay higher sales taxes. This bill levels the field and lets families deduct their state and local taxes, whether they’re on income or sales.
As the housing market continues to recover from the Great Recession, lots of American families are struggling to stay in their homes. Many homeowners found themselves underwater, owing more in mortgage debt than their houses were worth. To make matters worse, just when they caught a break and had their mortgage payments lowered or their debt forgiven, they got hit by a giant tax liability. Imagine that: once you finally get your head above water, a huge tax bill pushes you right back under. This bill contains a provision to prevent exactly that situation from happening, and to help keep American families in their homes by exempting their forgiven mortgage debt from taxation.
Over the past several years, states throughout the country have been forced to make a lot of painful fiscal choices. In many communities, the budget axe has fallen on education. Teachers routinely face classrooms of 30 or 40 students – maybe even more. Too often they run short on supplies and have to reach into their own pockets to make up the difference. These are overwhelmingly hard-working, middle-class professionals. This bill will help those teachers by letting them deduct up to $250 of those out-of-pocket expenses from their taxes. Oregon teachers deduct more than $9 million in classroom expenses each year.
And a college education is absolutely vital in our competitive, modern economy. For families and students paying for college – who face sky-rocketing costs and mountains of debt – this bill extends the $4,000 deduction for tuition expenses. Oregon families use it to deduct more than $61 million in tuition and fees annually. It gets harder every year to maintain a middle-class life without a college degree. That’s why this deduction is so crucial.
There’s one last part of this bill that I want to talk about – its incentives for clean energy. As the former chair of the Energy Committee, I know how critical investment in energy is for our nation’s economy. And it’s an area of our economy that’s been plagued by the stop-and-go nature of tax policy.
Now is the time the U.S. should be investing in a low-carbon, energy-diverse future. And some of the provisions in the EXPIRE Act have been incredibly successful in doing just that. The production tax credit for renewable energy – including wind, geothermal, hydropower, and biomass – has helped drive massive growth in renewable, clean energy. Wind energy, in particular, has boomed over the past five years. It now accounts for more than 60,000 megawatts of wind generation across the country.
American wind energy production has more than doubled since 2008. This is enough to power more than 15 million homes, and the industry supports more than 50,000 jobs. And the growth of this industry is a boon to American manufacturing, supporting more than 500 manufacturing facilities.
Still, the wind industry is not immune to the stop-and-go nature of tax extenders. Growth has leveled off over the past two years, mostly due to the expiration and late, retroactive renewal of provisions like the production tax credit (PTC). It’s critical to provide certainty to these businesses. In the energy sector, electricity generating stations and refineries are large investments that can take years to plan, finance, and construct. That’s why tax reform is so vital – this country needs a long-term, stable energy policy.
There are a lot of fresh ideas for how to improve energy policy in the tax code. While he was chairman of the Finance Committee, Ambassador Baucus put out a number of innovative, technology-neutral ideas that deserve a great deal of attention. But while working out those ideas in a transparent, bipartisan way, it’s important that Congress not let our domestic clean energy industry fall off a cliff, which is why this bill extends provisions like the PTC through 2015.
But clean energy is not just about generating more low-carbon electricity. It’s also about using energy more efficiently to reduce our overall consumption. That’s why the EXPIRE Act extends and updates a credit that helps out homeowners who want to improve their houses and make them more energy efficient. Whether it’s through better windows, installing insulation, or replacing your water heater or furnace, this provision would offer a little financial help. And these improvements can dramatically reduce the amount of energy used to heat and cool American homes, resulting in lower electricity bills.
The bill improves this provision by cleaning it up and updating its standards. It will be easier to use and help push the boundaries on energy efficiency by only allowing the most efficient improvements to qualify. Even in pushing for efficiency in how we use energy, it’s important to make smart use of taxpayer dollars.
Commercial buildings use a tremendous amount of energy – 20 percent of all electricity consumed in the United States powers the places where we work. By reducing this consumption, the U.S. can drastically cut emissions and lower costs for businesses. Passing this bill will help incentivize greater energy efficiency in our commercial buildings by allowing companies to deduct costs for new buildings that are substantially more efficient.
As you can see, there are a lot of good things in this bill. It will help spur investment and innovation, boost our communities and aid disadvantaged workers, and continue to drive the investments in clean energy and energy efficiency. Many of these provisions should be made permanent, and it would be a mistake to simply let them disappear. Some people might ask, “Why not make these provisions permanent immediately? Or why not pass tax reform now?”
That would be my first choice. Everybody knows our tax code is in bad shape. It’s complicated and opaque, and it needs fixing. The tax code should promote economic growth and treat everyone fairly. A lot of members of Congress have worked hard to develop ideas. But tax reform isn’t happening tomorrow. Reaching a comprehensive, bipartisan plan will take time, focus and hard work. It has to be done right. I’m committed to making our tax code work for all Americans, and the Finance Committee is ready to take on the job.
I’ve spent the past decade working with colleagues from both parties on tax reform, and put together the Senate’s first bipartisan federal income tax reform plan in thirty years. Senators Begich and Coats have pitched in, as well as former Senator Judd Gregg, who sat with me and worked on it nearly every week for two years.
Ambassador Baucus and Senator Hatch held an extensive series of hearings and put out bipartisan options papers, detailing a variety of paths forward for reform. The Finance Committee majority staff put out several discussion drafts. Chairman Camp in the House has put forward an ambitious tax reform draft that lays out several ideas on how to make the code simpler. All of these proposals contain the kinds of ideas we should examine as we look to reform our tax code. Once these extenders are settled, I look forward to working with Senator Hatch and my other colleagues on a broad-based tax reform plan that will grow the entire economy.
In the meantime, we can’t leave American families and American businesses out in the cold. Temporary provisions of the tax code continue to expire, leaving jobs, innovation, investment, and people’s homes in limbo. By providing some certainty to businesses and families for the next two years, the EXPIRE Act can create the space needed for true tax reform.
I don’t want us to lose sight of that during this debate. These extenders are important, and so is building a bridge to reform – reform that this country desperately needs.
We know that the inequities and the lack of certainty and predictability in the tax code are holding our economy back. We need a code that gives everybody in America the opportunity to get ahead.
Americans work hard for the money they earn each and every day. They want to pay their fair share. But when they’re asked to contribute part of their paychecks every month, they deserve a tax system that is transparent and equitable. We need to simplify the code. We need to level the playing field. We need to get rid of these disparities between different types of income that elevate some workers over others.
I encourage all my colleagues to think boldly about reform and be open to innovative, bipartisan ideas to improve the current system. The foundation has been laid, and a lot of work and sweat has already been put into the process. The road will be long, and the process likely difficult, but the American people need and deserve a better system.
While Congress works through this process, we can’t forget that the voters sent us here to work. They’re looking for results -- not excuses for why vets can’t find jobs, or why families are paying more for college, or why homeowners are facing a huge tax bill after getting out from under a mountain of mortgage debt.
Simply dropping these incentives sacrifices valuable priorities without getting the real job of comprehensive reform done. That’s why we need to pass the EXPIRE Act. By doing so, we’ll be helping promote growth, investment, and innovation, while building a bridge to tax reform.
So I urge my colleagues to join me in passing the EXPIRE Act. Let’s give our families and businesses certainty, and then let’s get to work on fixing our broken tax code.