Appearing on the Senate floor today, U.S. Senator Chuck Grassley, a Republican from Iowa, took a stand for wind power and the clean energy tax provisions critically important for its growth.
In his speech, Sen. Grassley said "just because we haven't cleaned up the tax code in a comprehensive way [it] doesn't mean that [Congress] should pull the rug out from under domestic renewable energy producers" and "doing so would cost jobs, harm our economy, the environment and our national security."
Senator Grassley continued by highlighting just a few of wind power's many benefits: "Wind energy supports tens of thousands of American jobs, it has spurred billions [of dollars] in private investment in the United States, and it displaced more expensive and more polluting sources of energy."
"I'm glad to defend the wind production tax credit and wind energy."
Read the Senator's full statement below:
Grassley: Expired Tax Provisions Require Action
Floor Statement by Senator Charles E. Grassley
The Need to Act on Tax Extenders
Delivered Thursday, November 20, 2014
Here we are in another lame duck session of Congress working to finish the business that we’ve failed to complete during the previous year or two.
One of those critical pieces of legislation that must be enacted is a tax extender bill.
It seems as though nearly every year in recent memory we’ve put off the extension of expired tax provisions until the very last minute.
In 2012, provisions remained expired for an entire year before finally being extended in January of 2013.
Similarly, the previous extension of expired provisions did not occur until the middle of December.
Now, once again we find ourselves heading into the month of December with tax extenders having been expired for nearly eleven months.
This is no way to do business. Such late action by Congress results in complications come filing season for taxpayers.
Tax season is unpleasant enough without us adding to it by failing to do our job in a timely fashion.
But, once again, we have created a lot of headaches and uncertainty for individuals and businesses.
This uncertainty harms investment and business growth.
This is bad for economic growth and bad for jobs.
The lapse of renewable energy incentives has also created a lot uncertainty and slowed growth in the renewable industry.
This serves only to hamper the strides made toward a viable self-sustainable renewable energy and fuel sector.
It didn’t have to be this way.
The Senate Finance Committee, under the leadership of Chairman Wyden and Ranking Member Hatch, did its job.
We marked up an extenders package in early April.
The Senate never took up that package because the Majority Leader refused to allow Republicans to offer amendments.
Rather than consider and advance the Finance Committee bill, the Majority Leader shelved the extenders bill because of fear that members of his party might have to take tough votes before the election.
With the elections behind us, it’s now time to get to work and get the extenders bill done.
I understand that negotiations are ongoing between the House and Senate on this issue.
I’m encouraged by the reports that progress is being made.
However, I am concerned about rumors that some are working to leave out or shorten the extension for the wind production tax credit.
It seems as though opponents of wind energy have tried at every turn to undermine this industry, and so I’m not surprised that they’re at it again.
I agree that the tax code has gotten too cluttered with too many special interest provisions.
That’s the reason many of us have been clamoring for tax reform for years now.
But, just because we haven’t cleaned up the tax code in a comprehensive way doesn’t mean that we should pull the rug out from under domestic renewable energy producers.
Doing so would cost jobs, harm our economy, the environment and our national security.
I’m glad to defend the wind production tax credit and wind energy.
Wind energy supports tens of thousands of American jobs, it has spurred billions in private investment in the United States, and it displaces more expensive and more polluting sources of energy.
More than 70% of a U.S. wind turbines value is now produced in the U.S., compared to just 25% prior to 2005.
Once again, opponents of the renewable energy provisions want to have this debate in a vacuum.
They disregard the many incentives and subsidies that exist for other sources of energy, and are permanent law.
For example, the 100 year-old oil and gas industry continues to benefit from tax preferences that benefit only their industry.
These are not general business tax provisions – they are specific to the oil and gas business. Here are a few examples:
• Expensing for intangible drilling costs
• Deduction for tertiary injectants
• Percentage depletion for oil wells
• Special amortization for geological costs
These four tax preferences for this single industry result in the loss of more than $4 billion annually in tax revenue.
Nuclear energy is another great example.
The first nuclear power plant came online in the United States in 1958 – 56 years ago. Nuclear receives special tax treatment for interest from decommissioning trust funds.
Congress created a production tax credit for this mature industry in 2005, which is available until 2020.
Nuclear also benefits from Price-Anderson, federal liability insurance, that Congress provided as a temporary measure in 1958. This temporary measure has been renewed through 2025.
Nuclear energy has also received $74 billion in federal research and development dollars since 1950.
Are these crony capitalist handouts? Is it time to end market distortions for nuclear power?
A Cato study found that “In truth, nuclear power has never made economic sense and exists purely as a creature of government.”
I don’t understand the argument that repealing a subsidy for oil or gas or nuclear energy production is a tax increase on energy producers and consumers, while repealing an incentive for alternative or renewable energy is not.
It’s not intellectually honest.
I authored the wind incentive in 1992. I know it won’t go on forever. It was never meant to, and it shouldn’t.
I’m happy to discuss a responsible, multi-year phase out of the wind tax credit.
In 2012, the wind industry was the only industry to put forward a phase out plan.
But, any phase out must be done in the context of comprehensive tax reform, where all energy tax provisions are on the table.
And, it should be done responsibly over a few years, to provide certainty and ensure a viable industry.
It’s time to put an end to the annual kabuki dance that is tax extenders.
Good tax policy requires certainty that can only come from long-term predictable tax laws.
Businesses need certainty in the tax code so they can plan and invest accordingly.
Moreover, taxpayers deserve to know that the tax code is not just being used as another way to dole out funds to politically favored groups.
However, the only sound way to reach this goal is through comprehensive tax reform.
I agree that there are provisions in extenders that ultimately should be left on the cutting room floor.
But, it is in tax reform where we should consider the relative merits of individual provisions.
Targeting certain provisions for elimination now makes little sense for those of us who want to reduce tax rates as much as possible.
Tax reform provides an opportunity to use a realistic baseline that will allow the revenue generated from cutting back provisions to be used to pay for reductions in individual and corporate tax rates.
I look forward to working with my colleagues in the future to enact tax reform and put an end to the headaches and uncertainty created by the regular expiration of tax provisions.
Right now our focus must be on extending current expired or expiring provisions to give us room to work toward that goal.
It is my hope that we can move quickly to reach a bipartisan, bicameral agreement that can quickly be enacted.
Taxpayers have already waited long enough.