Dive Brief:
- President Obama has threatened to veto a $440 billion Congressional tax deal that includes an extension of the production tax credit for wind energy, the New York Times reports.
- The bill, a compromise between outgoing Senate Majority Leader Harry Reid (D-Nev.) and Senate Republicans, would extend the tax credit until 2017, after which it would phase out and end. The White House, generally supportive of renewable energy, says the overall package includes too many tax cuts for corporations and not enough relief for working families.
- Congressional Democrats say a veto from the President on the package would be sustained, according to the Times. If the wind tax credit is not extended it would lose 20% of its value in 2016, decrease to nothing by the end of 2017.
Dive Insight:
An extension of the wind tax credit was a top Democratic priority for the lame duck session, Utility Dive reported in October. Then, unnamed staffers from Senator Reid's office indicated that extending production tax credits for wind energy was their top priority for the lame duck session.
Analysts and Washington insiders also expressed optimism that a wind PTC deal could get done before Republicans took over the entire Congress in January, but the initial confidence had faded in recent weeks as Congressional Republicans, some major utilities and conservative interest groups targeted the incentives for attack.
Tuesday's veto threat from the White House serves as an assertion of President Obama's authority at least as much as a rebuke of Reid, the outgoing majority leader, whose negotiations with Congressional Republicans separated him from the Obama administration, the Times reports.
A veto would be the third and most consequential of Obama's presidency. Observers say the threat is meant to send a message to Republicans to include more liberal proposals in a deal, such as a permanent expansion of the child tax credit for the working poor.
