WASHINGTON — Congress will likely pass a separate bill to extend expired and expiring tax law provisions, some of which are bond-related, before the end of the year, the chairman of a House Ways and Means panel told reporters after a hearing Friday.
However, Rep. Pat Tiberi, R-Ohio, chairman of the select revenue measures subcommittee, said it is “possible but not probable” that a separate package will pass before the November elections, though he would like to see it done sooner rather than later.
“There’s been no leadership from the White House, which is very frustrating,” he said.
Tiberi held the second in a series of congressional hearings aimed at examining the merits of extending, making permanent, phasing out or immediately eliminating dozens of expired or expiring tax provisions. Republicans insist the package will have to be paid for, but Tiberi did not elaborate on potential sources of funding.
Aggregate revenue losses from tax expenditures were estimated at $1 trillion in fiscal 2011, according to the General Accountability Office.
“One step at a time,” Tiberi said. “Everything is still on the table. We’re still going through the process.”
Tiberi expressed skepticism about extending the Build America Bond program after Rep. Mike Thompson, D-Calif., and witness Aaron Gornstein, Massachusetts’ undersecretary for housing and community development, made a pitch for it.
Under the program, which was created in 2009 by the American Recovery and Reinvestment Act and expired at the end of 2010, issuers sold more than $181 billion of BABs and received subsidy payments from the federal government equal to 35% of their interest costs.
“Obviously, it’s still on the table,” Tiberi told The Bond Buyer. “It’s something important to some members of the committee and some members of Congress. We’re still trying to get information. I’d say its not one where there is clear, concise information and it’s not one without its controversy.”
The committee needs to ensure that the tax code is working efficiently to create jobs and contribute to economic growth, Thompson said. One way it could do that quickly would be to extend certain expired provisions that could help spur job creation, such as BABs, he said.
Thompson said he wants to see a vote scheduled on some of these tax provisions soon in order to pave a path for their extension.
Similarly, Gornstein urged lawmakers to extend BABs, empowerment zone bonds, low-income housing tax credits and the new market tax credit, saying they proved to be successful job creating programs.
“We cannot afford to lose these instruments of economic growth,” he said. He asked for BABs to be extended until at least December 2013.
“As we wait for Congress to act on a long-term extension of the highway bill, reinstating the BAB program could help ensure that projects are not terminated or even aborted because of the uncertainty of project funding,” he said.
Meanwhile, Rep. Charles Boustany, R-La., suggested that it would be “very smart” to split up some of the tax expenditures that have broader bipartisan support and passed in smaller groups.
The subcommittee also heard from three other witnesses including James White, the Government Accountability Office’s director of strategic issues, who outlined criteria lawmakers should consider for tax policy.
Three long-standing criteria used to evaluate tax policy — equity, economic efficiency and a combination of simplicity, transparency and administrability — can be applied to the expiring tax expenditures, White said. Revenue effects, tax provisions’ relationship to other policy tools and measurement challenges also are critical in evaluating tax policy in general, he said.
“Deciding whether to extend an expiring expenditure involves considering whether the benefit of the intended outcome is worth the effect on other programs or tax rates,” he said.
