April 17,2008

Baucus Floor Statement on the Introduction of Tax Extenders Legislation

Mr. President, today I am introducing a tax package that would extend relief from the
alternative minimum tax and extend other much-needed individual and business
provisions.

When the economy is turning down, Americans need certainty about their taxes.
Families and businesses need to know what the tax law is.

That’s why my bill provides a one year patch for the AMT. The patch will hold the
number of taxpayers subject to the AMT at 4.2 million. We will not let more taxpayers
fall into the alternative minimum tax.

Last year, Congress did not put a patch in place until December. We must act sooner this
year. Through this bill, Congress can act.

And that’s why my package contains a two-year extension of provisions that expired at
the end of last year.

These include the qualified tuition deduction to give families relief from high tuition
costs.

My package also includes the teacher expense deduction. This deduction gives teachers
some of the money that they spend on school supplies to educate our children.

The package also includes the state and local sales tax deduction for those states without
an income tax.

The bill offers an extension of the research and development credit. This credit gives an
incentive to businesses to invest in research. It helps to keep America competitive in the
global economy.

My package will also extend provisions that expire this year for an additional year.
The bill extends much-needed energy provisions.

Public and private investment in the renewable energy sector was about $90 billion
worldwide last year. That’s a 27 percent increase over 2006.

Congress can direct this investment toward the U.S. — rather than overseas — by
supporting clean energy tax incentives.

These incentives include tax credits for wind and solar power, efficient buildings and
appliances, and clean renewable energy bonds.

These provisions are not only good energy policy. They also create jobs. This package would also extend wind and solar provisions.

The American solar industry employs 20,000 Americans. With a long-term extension of
the solar tax credit, that number would triple.

The American wind industry expanded by 45 percent in 2007. It contributed about 30
percent of the new power capacity in America last year.

These job-creating industries are growing fast. We should support them. We know what
happens when we don’t.

For example, the tax credit for production of renewable energy was enacted in 1992,
starting the growth of renewable power in the U.S.

But since 1999, this credit has expired three times. And when it expires, clean energy
suffers, leading to declines between 73 percent and 93 percent in wind energy
investment.

We need to keep this credit going to ensure consistent investment in the wind power
industry.

This package would also promote energy efficiency. Efficiency is the low-hanging fruit
in the energy debate. We can make big strides toward energy independence and a clean
environment by getting more for our energy buck.

For example, ENERGY STAR — a voluntary labeling program designed to promote
energy-efficient products — saved businesses, organizations, and consumers an estimated
$14 billion in 2006.

Efficiency also creates jobs. The American Solar Energy Society reported that in 2006,
the efficiency industry created eight million jobs, over half of them in manufacturing.
The government plays a key role in sustaining the efficiency industry, through tax
incentives for efficient commercial buildings, homes, and appliances.

This package would also extend the clean renewable energy bonds, or CREBs.

CREBs passed in the Energy Policy Act of 2005. CREBs spurred more than 700 new
wind, biomass, solar, and hydro projects. The number of projects far exceeded the
funding available to pay for them.

But CREBs funding lapsed at the end of 2007. And that halted development of new
projects and the green-collar jobs that go with them. We must keep these projects going.

The CREBs provision was written for non-taxable entities like rural co-ops. Those nontaxable entities cannot use other tax incentives in this package.

I’ve listed just a few of the important energy items in this extenders bill. There are more.
And I plan to build upon this package as it makes its way through the legislative process,
with edits and additional items. The Finance Committee has been working to that end for
the better part of a year.

Last June, the Finance Committee passed a roughly $30 billion energy-tax package, with
a resounding bipartisan vote. A majority of the Senate voted for that bill. But we were
just shy of getting the required 60 votes.

We tried again in December, with a slimmer package. That time, we fell short of the
required 60 by just one vote.

We then tried in February, as part of economic stimulus bill. We offered a package very
similar to what passed last week. That amendment got 58 votes.

And last week, this body passed, by a solid 88 to eight vote, a package of energy-tax
extenders, similar to the package considered during the economic stimulus debate.

A vote of 88 to 8 might suggest that there’s smooth sailing ahead on energy-tax
legislation. But I’m afraid that’s not the case.

The day before the Senate passed its housing bill, including the energy-tax package, the
House Ways and Means Committee passed its own housing relief bill.

The Ways and Means bill restated the House’s position on pay-go. The House requires
that the cost of the tax package be offset.

And how did the Ways and Means Committee offset the bill? Largely with a provision
called “basis reporting.” President Bush included this in his 2009 budget proposal.

In other words, the House paid for a tax package with an item already supported, at least
in principle, by the President.

And while I believe that this Congress should have paid for energy-tax legislation with
the offsets passed by Finance Committee last year, it’s not clear that passing that package
gets us any further to extending these important tax incentives.

That’s why I have been working on offsets that can pass both bodies and be signed by the
President. And that’s what I will continue to do to get these important energy items — as
well as other vital extenders — passed.

By taking care of this now, we can spend more of our time on other things like tax
reform.

I plan to hold several hearings and roundtables to discuss tax reform. We began this
week. I’m serious about simplifying our tax code. I’m serious about helping the
American people.

Congress should do more than just extend legislation. Congress needs to work on new
policy, new legislation, and new ideas. And by enacting this legislation, we can turn to
those important goals. I urge my Colleagues to support this package.

I ask unanimous consent that the text of the bill be printed in the Record at this point.

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