Grassley Speaks about Introducing Tax Extenders Package
Prepared Remarks by Senator Chuck Grassley of Iowa
Chairman, Senate Finance Committee
On Tax Extenders Bill
Thursday, February 28, 2019
Before the Presidents’ Day recess, I announced that I’d introduce legislation if tax extenders weren’t included in the legislation to keep the government open.
Today, I’m following through on that promise with a bill that I’m introducing with Finance Committee Ranking Member Wyden.
It’s fitting that I’m taking this step in the same month as Groundhog Day, as the subject of my remarks is something Congress has had to deal with too many times already.
Next to me is a chart from the movie “Groundhog Day,” which is about a man named Phil who must relive the same day over and over again until he gets it right.
While we still need to break the cycle of repetitive short-term extensions, the right thing to do right now is extend these already expired provisions for 2018 and 2019.
As I’ve said before, the tax extenders are a collection of temporary tax incentives that have required extension on a regular basis in order to keep them available to taxpayers.
Currently there are 26 provisions that expired at the end of 2017 that need to be extended, and three more that expired at the end of last year.
Today, we’re in the middle of the filing season for 2018 tax returns, and taxpayers affected by these expired provisions need a resolution so they can file.
I want to stress that I want to find a long-term resolution so we don’t have temporary tax policy.
But, it’s critical we make it clear to taxpayers that these provisions are available for the 2018 filing season.
And, extending them for this year will give us room to take a long-term view of this temporary tax policy.
Many of the tax extenders are intended to be incentives, and to be successful, they need to be in effect before decisions are made.
This is why we should provide extensions for at least two years to maximize that incentive effect.
But, it’s also important that we extend these provisions for 2018, even though the year has obviously already ended.
We have developed a bad habit of extending these tax provisions year after year, and people and businesses have come to expect the extension will happen.
As a result, decisions were made in 2018 based on that expectation.
In other words, people did what we wanted them to do when these provisions were created.
We should not retroactively punish them for that.
Today a diverse group of organizations, including the National Biodiesel Board, the American Trucking Associations and the National Corn Growers Association, among many others, sent a letter to congressional leaders requesting that the expired provisions be extended through 2019 as quickly as possible.
The letter notes in part,
“Providing taxpayers with a predictable planning outlook as it pertains to tax rules is conducive to increased private sector investment and economic activity. Accordingly, we respectfully ask that you act to retroactively extend these expired tax provisions through 2019 on the first appropriate legislative vehicle.”
I ask unanimous consent that the complete letter be printed in the record.
Another important point I want to make has to do with the question of whether an extenders package should be offset or not.
The House has its pay-as-you-go, or PAYGO, rule.
I have a long record of promoting budget responsibility, and I am as concerned about the deficit and debt as much as anyone.
However, we also have bipartisan precedent for treating the extension of temporary tax policy like we treat the extension of annual spending policy.
In neither case do we offset such extensions.
There are a few specific items in this legislation I want to mention.
Significant work has already been done to provide long-term solutions on two extenders – the short-line railroad tax credit and the biodiesel tax credit.
The bill I’m introducing extends those credits at their current levels for 2018 and 2019.
But I remain committed to enacting the compromises that several of our colleagues and I’ve worked with the stakeholders to achieve.
The bill also includes an extension of a proposal adopted last Congress that extends the 7.5- percent floor for itemized deductions of medical expenses.
Without this provision the floor on deductions will be 10 percent for 2019. This means that without this provision, individuals with chronic illnesses and high medical expenses would have to pay more for health care before they can deduct the expenses on their 2019 tax returns.
This proposal is a very important priority for Senator Collins, and she deserves a lot of credit for getting what has turned into a bipartisan proposal to help many Americans facing catastrophic medical expenses.
Finally, the legislation includes provisions to assist Americans who have been affected by natural disasters in 2018.
This package includes proposals we have adopted in prior years to help Americans recover from disasters across the country.
For example the package would allow increased access to retirement funds and relax restrictions around charitable giving.
I’m sure everyone here would like to help people affected by natural disasters as soon as we are able to.
I don’t want my comments today to imply that each tax extender should be permanently extended.
But the right thing to do right now is to provide extensions for at least 2018 and 2019.
In the long-term, Congress needs to decide whether these provisions should be allowed to expire, be phased-out, or made permanent as current policy or modified in some way.
Those decisions need to be made after we resolve the short-term crisis caused by the current lapse.
These provisions have support of Members on both sides of the aisle.
And there’s a solid foundation for a long-term package consisting of many of these provisions in one form or another.
We need to get past today, so we can chart the course for a reliable future for the tax extenders.
Just as Phil wants to stop living the same day over and over again, I think all of us want to break the cycle of short-term extensions of, in many cases, very popular policies.
The legislation I introduce today with Ranking Member Wyden is a critical first step toward helping taxpayers complete their 2018 returns and helping us begin work on a long-term solution to temporary tax policy.
I have asked the Leader to Rule 14 this bill onto the calendar, and I urge the House to send us a tax bill to address the extenders without further delay.
I yield the floor.
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