WEEK IN REVIEW: Congress passed a (almost-drama-free) bill to raise the U.S. borrowing limit through March 2015... Wyden stuck to extenders message... Warner officially joined Senate Finance... Obama proposed new energy tax credit... IRS released "roadmap" for transfer pricing audits.
LEGISLATIVE LANDSCAPE
The House and Senate are on recess this week, but before leaving town they passed a bill raising the limit on the U.S. Treasury's borrowing authority through March 2015. A divided House passed the clean debt-ceiling bill on Feb. 11, with support from less than 40 of the majority House Republicans.
A tense vote followed in the Senate Feb. 13, after Sen. Ted Cruz, R-Texas, threatened to block a vote on the bill. Senate Minority Leader Mitch McConnell, R-Ky., joined 11 other Republicans in breaking the filibuster and allowing the vote for passage. President Obama signed the bill into law over the weekend, removing the threat of a default on the nation's bills for at least the next year.
Wyden Sticks to "Extenders-as-Bridge" Metaphor. Sen. Ron Wyden, D-Ore., the newly minted chairman of the Senate Finance Committee, reiterated what has become a familiar refrain while doing an interview with Bloomberg Television, calling for the prompt passage of dozens of currently expired "extenders" as a "bridge for more comprehensive reform." Wyden indicated that he would be in favor of extending all the expired tax breaks for now, leaving more critical review for tax reform negotiations down the line.
Speaking of Extenders. Finance Committee members Sens. Maria Cantwell, D-Wash., and Chuck Grassley, R-Iowa, introduced a bipartisan bill Feb. 14 to bring back -- and expand -- the biodiesel tax credit. The bill would extend the $1-per-gallon tax credit for biodiesel producers for three more years, through 2017, and it would increase the credit to $1.10 for the first 15 million gallons made by small producers that generate less than 60 million gallons annually. The legislation would also extend the credit to biodiesel made from any biomass-based feedstock or recycled oils and fats.
POTUS Floats New Tax Credit. Meanwhile, President Obama proposed a new energy tax credit Feb. 18 to support investment in advanced energy vehicles. The proposal came in conjunction with the administration's announcement that it will begin the rule-making process for more stringent fuel efficiency and greenhouse gas standards for medium- and heavy-duty trucks. According to a White House fact sheet, the proposed $200 million tax credit would be fuel neutral and would "catalyze investment in the necessary infrastructure to support deployment of advanced vehicles at critical mass." In addition, the President proposed extending the cellulosic biofuel producer credit that expired on December 31, 2013.
Warner Joins Finance. Sen. Mark Warner, D-Va., was officially named last week as the newest Democratic member on the Senate Finance Committee. As we mentioned last week, Warner has developed a reputation for supporting business-friendly tax provisions and has floated proposals for permanent and expanded research and development tax credits in the past.
REGULATORY WORLD
In Case You Get Lost. The Internal Revenue Service released its roadmap Feb. 14 for navigating a transfer pricing audit. The roadmap lays out the three phases of what is typically a two-year process, including a planning, execution and resolution phase. The roadmap can be viewed here.
COURTS & LEISURE
Summers Touts Tax Reform. Former Treasury Secretary Lawrence Summers pushed for tax reform in a Washington Post op-ed on Sunday, arguing that an overhaul of the tax code would improve the country's growing wealth gap.
LOOKING AHEAD
Back in Town. The House and Senate return next week (Feb. 24). There are currently no hearings scheduled that are relevant to tax policy until March 4, when the House Judiciary Committee plans to hold a hearing on Internet sales tax issues.
Budget Royale. President Obama will release his budget for fiscal year 2015 on March 4.
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