Hoyer backs one-year extension of tax breaks

House Minority Whip Steny Hoyer (D-Md.) on Tuesday said he would support a plan from House Republicans to renew a long list of expired tax benefits for one year.

Hoyer is the highest-ranking Democrat to back the package, lending a good deal of momentum to the proposal unveiled this week by Ways and Means Committee Chairman Dave Camp (R-Mich.).

{mosads}Hoyer said that, while he’d rather have a longer-term deal to lend more certainty to the economy, the 12-month package leaves plenty of time for lawmakers to work on a larger tax-code overhaul next year.

“I would prefer a two-year extension. I think that gives more confidence,” Hoyer told reporters in the Capitol. “But I would support a one-year extension because it does give, then, time over the next year to address what all members say needs to be addressed — and that is a comprehensive tax reform [bill].”

Introduced Monday, Camp’s bill would provide a one-year renewal for most of the more than 50 tax breaks that expired at the end of 2013.

President Obama last week threatened to veto a much larger package of permanent tax breaks being negotiated by Camp and Senate Majority Leader Harry Reid (D-Nev.). The veto threat was praised by Hoyer and other Democrats who thought the bill was titled too heavily toward big business.

Camp’s one-year proposal would cost roughly $45 billion, about a tenth as much as the larger package.

Huddling with House Democrats in the Capitol Tuesday morning, Treasury Secretary Jack Lew stopped short of fully endorsing the one-year extension, according to a person in the room. But Lew did make clear that a one-year solution was far preferable to the Reid-Camp plan.

“There are virtues to a one-year extension,” Lew told House Democrats, according to the source. “There are virtues to a two-year extension.”

Top Republicans, including Speaker John Boehner (R-Ohio) and Rep. Paul Ryan (R-Wis.), wasted no time blaming Obama for the failure to reach a longer-term agreement.

“The president blew up the deal,” Ryan said Tuesday. “We had a good one.”

Rep. Sandy Levin (Mich.), senior Democrat on the Ways and Means Committee, has also endorsed the one-year approach, saying it’s a workable alternative to the “damaging” Reid-Camp deal.

“We avoided a totally unsatisfactory result from last week,” Levin said Tuesday. “And having avoided it, this is the best way to move ahead.”

But it’s far from clear whether Senate Democrats feel the same way.

Reid has now taken on more of a supporting role in negotiations, and Finance Committee Chairman Ron Wyden (D-Ore.) on Monday talked down the idea of a one-year deal.

That’s, in part, because Camp’s latest plan would not extend a tax break long championed by Wyden for electric motorcycles, nor a healthcare preference for workers who lose their jobs. 

On Tuesday, Sen. Sherrod Brown (D-Ohio), who opposed the broader deal last week, blasted the GOP’s new proposal as well, calling it “unfathomable” that Republicans would seek to cut off the healthcare credit.

“We must reach a balanced tax deal that provides these working families with the same fair shake and certainty we give businesses,” Brown said.

Hoyer, for his part, suggested the short window left in the lame-duck session leaves all sides with little choice but to hold their noses and swallow Camp’s one-year package.

“I’m not saying that doing a one-year, unpaid for extension is the best policy. It’s not,” Hoyer said.”[But] as a practical matter, in the time we have remaining, nobody thinks we’re going to adopt tax reform. Even if we had the political will to do so, we don’t have the time to do so.”

On the separate issue of funding the federal government, Hoyer declined to weigh in on the strategy the Republicans are eying for a long-term funding extension. The plan would fund most of the government until September, but only a few months of funding for the agency overseeing Obama’s recent executive action on immigration.

House Minority Leader Nancy Pelosi (D-Calif.) came out sharply against the so-called “cromnibus” strategy last week.

But Hoyer, while calling it “a game,” also left the door open to supporting it.

“They haven’t made a final decision,” Hoyer said, “so I’m not a hard ‘no’ or ‘yes,’ because I don’t have a hard idea of what they’re going to put forward.”

Congress has until Dec. 12 to reach a funding agreement, or much of the federal government will shut down.