Conservative Republicans Balk at U.S. Tax, Spending Deal

December 16, 2015, 5:01 PM UTC
Speaker Paul Ryan speaks about Syrian Refugee Legislation
WASHINGTON, USA - NOVEMBER 19: Speaker of the House Paul Ryan speaks to the press about legislation being introduced in the House of Representatives to modify the 1980 Refugee Act in Washington, USA on November 19, 2015. (Photo by Samuel Corum/Anadolu Agency/Getty Images)
Photograph by Samuel Corum — Anadolu Agency via Getty Images

By Richard Cowan and Susan Cornwell

WASHINGTON, Dec 16 (Reuters) – A sprawling deal to keep the U.S. government operating through next September met resistance on Wednesday from conservative Republicans and the House Democratic leader, who called proposed tax breaks a “massive giveaway” to special interests.

The deal, which would also put an end to a 40-year-old ban on oil exports, was tentatively embraced by negotiators late on Tuesday. It includes a $1.15-trillion U.S. government spending bill and a companion $650 billion package of tax breaks.

House of Representatives Speaker Paul Ryan said he was confident of a bipartisan compromise and that there is “no reason to believe we’re going to have a shutdown” of the federal government.

The deal is due to be voted on later this week in the Republican-controlled House and Senate.

Some Republican fiscal hawks balked at the funding bill, raising questions about the support for it in the House, though it was unclear whether conservatives had the votes or the inclination to push the country to a government shutdown.

Representative Jim Jordan told Reuters he believed the so-called Freedom Caucus and other conservative Republicans would vote against the “omnibus” spending bill because it failed to include provisions to tighten U.S. screening of Syrian refugees, address national security concerns and deny funding to Planned Parenthood, a target of abortion rights opponents.

It also contained too many concessions to Democrats, he said. “The omnibus I think has real problems, not just with Freedom Caucus members, but with lots of Republicans,” Jordan said after meeting with colleagues.

Representative Tim Huelskamp, a frequent critic of past Republican fiscal measures, also objected to the Planned Parenthood omission and said the legislation includes nothing to stop President Barack Obama’s program to bring thousands of Syrian refugees to the United States.

“As I see it (the bill) now, no, I’m not planning on supporting it,” Huelskamp told reporters late on Tuesday.

House Democratic leader Nancy Pelosi also cited concerns.

“Republicans’ tax extender bill provides hundreds of billions of dollars in special interest tax breaks that are permanent and unpaid for,” Pelosi said in a statement. “These massive giveaways to the special interests and big corporations are deeply destructive to our future.”

In return for a repeal of the oil export ban, Democrats won temporary tax breaks to boost wind and solar development, Representative Ann Wagner said. These are important priorities for Obama after a Paris climate change deal that calls for significant global reductions in carbon dioxide emissions.

Other elements of the two bills that are expected to move through Congress in coming days, according to Republican lawmakers, include:

– A $650-billion package extending a package of tax breaks over 10 years, with $560 billion of the total in permanent extensions, including for business research and development.

Many Democrats were expected to oppose this measure, saying it costs too much and is too heavily skewed toward corporate interests. But it does include a provision Democrats sought, making a child tax credit permanent.

– Changes to a visa waiver program that will tighten travel curbs on those who have been in Iraq and Syria;

– No “bailout” for Puerto Rico, which is experiencing fiscal difficulties;

– Provisions to encourage companies to share cyber data with the U.S. government in its fight against hackers;

– The “179” deduction, a tax break small business owners use to buy new equipment, is being made permanent;

– A two-year delay in a 2.3 percent excise tax on medical devices and a “Cadillac tax” on high-cost healthcare plans. Representative Tom Cole said the tax package also would include a one-year delay in a tax on health insurance providers.

He said it also extends for another year a provision limiting how much the government can spend on “risk corridors” protecting insurers against financial losses under Obama’s landmark healthcare law;

– A five-year renewal of a program to help first responders and others who suffered illness from exposure to toxins at the World Trade Center site destroyed in the Sept. 11, 2001 attacks.

Before Congress debates these long-term bills, it is expected on Wednesday to pass another stop-gap funding bill giving lawmakers until Dec. 22 to complete their work. Without the temporary measure, federal funding for a range of government programs expires at midnight on Wednesday.

A congressional aide said negotiators were likely to block a proposal to revise certain legal protections for bondholders, a provision that had been pushed by Senate Democratic leader Harry Reid, partly to ease the bankruptcy of casino giant Caesars Entertainment’s operating unit.

(Reporting by Susan Cornwell, Doina Chiacu, David Lawder and Richard Cowan; Editing by Alistair Bell)

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