Tax Cut

Does the Recent Government Shutdown Affect 2018 Tax Credits?

The US President Donald Trump claimed that it was the Republicans´responsibility to ensure that the government being active. He even tweeted that “House Democrats want a SHUTDOWN for the holidays in order to distract from the very popular, just passed, Tax Cuts. House Republicans, don’t let this happen. Pass the C.R. TODAY and keep our Government OPEN!”

A couple of days before the shutdown, some Republican leaders planned to hold separates votes concerning a short-term government funding package and a massive $81 billion disaster package responding to a string of hurricanes and wildfires.

Besides, there was a noticeable internal tension in the House of GOP, and it did not know what the Senate was about to do with whatever the House ultimately passes. The Resistance to the disaster aid package within the Senate could have pushed the consideration into this year, and this could have affected Texas and Florida lawmakers who were supposed to wait for their disaster funding approved.

Several environmental groups sent letters to the lawmakers asking them to make sure that adequate funding for environmental programs, no anti-environmental policy riders and equal treatment for defense and non-defense programs were considered.

At the same time, the Senate Finance Committee presented a bill with the purpose of extending or expanding the energy credit some lobbied for. Thus tax writers did not make a great effort at work due to the fact that they mainly changed the end dates for credits that were already gone.

Many positions were taken about the extension or expansion. For instance; Kevin Brady, Ways, and Means Chairman said that he “doesn’t want to do extenders” now, but “he’d turn to a strategy for how to advance them “after we get back” from the holiday break.” But Orrin Hatch, a spokesperson for Senate Finance Chairman, would not offer specifics on timing either but said the Utah Republican wants to address the extenders “in short order.”

The mentioned bill included the most supported credits such as a nuclear tax credit extension, an expansion of the carbon capture tax credit, and the biodiesel blenders’ credit. These three credits brought the support of South Carolina’s delegation, the Midwesterners. And this combination also bought the concern climate change and stated with massive coal production.

It seems that all wishes were compiled in the bill with the idea of applying and extending tax credits through 2018 for biodiesel blenders, cellulosic biofuel producers, fuel cells, energy efficient homes, energy efficient commercial buildings, small wind, two-wheeled electric scooters, solar water heaters, geothermal heat pumps, and coal production on Indian land.

The Senator Chuck Grassley revealed that he wanted to convert the biodiesel blenders’ credit, companies that mix biodiesel into petroleum diesel, into a producers credit, which would go to those who make the biofuel. However, he did not understand it because The Finance Committee extended the expired blenders’ credit and made it retroactive.

As a consequence, the US Senate has approved a short-term measure to avoid a government shutdown. This bill extends funding for the Children’s Health insurance Program, and it also included an extension of a government surveillance program.

As soon as it was approved, the House passed the $81 billion disaster aid bill destinate to devastating hurricanes and wildfires damages. Additionally, the bill includes money for hurricane recovery in Texas, Florida, Puerto Rico ad the US Virgin Islands, as well as, the fires that affected California.

As regards Republican leaders, they were at and passed before the voting. However, some changes emerged along the day. Mac Thornberry, the House Armed Services Chairman, said he had had some “very intense conversations” with his leadership, Defense Secretary Jim Mattis and others about finalizing a broader deal.

He added, “I am pretty optimistic that we will be able to have an agreement (…) that starts the rebuilding process of the military, but we’ve got to quit using the military as a political pawn.”

After passing the tax overhaul, which dropped the corporate tax rate, reduced individual tax rates and expanded the child tax credit, the GOP tried to get the votes for a short-term spending bill.

It was Nancy Pelosi, the Democratic leader, who encouraged her members to vote against a short-term continuing resolution. The Party was seeking to add an extension or permanent legislative version of the DACA ( Deferred Action for Childhood Arrivals program) as well. Nevertheless, it will be not included in this bill.

In their weekly meeting, Democratic leaders stated that there had not been efforts to start any kind of talks and they persuaded their members to vote ´no on the stopgap funding bill and the disaster aid package.

Ön the other hand, Republicans intended to pass a new package to aid disaster zones that were affected by hurricanes and fires. As a senior House Democratic leader stated about the Republicans “they are on their own,” This might refer to the idea that some Democrats may vote for the bill providing resources to rebuild after a series of storms.

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