May 15 (Bloomberg) — Senators will take their first major test vote today on a package of more than $80 billion in tax breaks, and the outcome is uncertain.
Republicans, who support many of the provisions in the bill, are complaining about Democrats' refusal to allow them to offer amendments. Democrats say the bill must advance to prevent a tax increase.
"If you don't renew that provision, the research and development credit, in effect, today, the Senate will be voting to raise taxes on innovation," Senate Finance Committee Chairman Ron Wyden, an Oregon Democrat, said on Bloomberg Television.
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The bill would revive dozens of tax breaks that lapsed on Dec. 31 and extend them through 2015, including the ability for companies such as Citigroup Inc. to defer U.S. taxes on overseas financing income and a provision that lets individuals deduct state sales taxes.
The bill doesn't include spending cuts or tax increases to offset the $84.1 billion effect on the budget deficit.
Today's procedural vote, scheduled for 1:45 p.m., Washington time, requires at least 60 senators to support it, which means that at least five Republicans must join with Democrats.
Final passage wouldn't occur until next week, and the Republican-controlled House has been taking a different approach to the issue.
No amendments
Senator Charles Grassley of Iowa said he hasn't decided whether to join Democrats to advance the bill.
Grassley, who supports many of the tax breaks in the bill, including the production tax credit for wind energy, said he won't make up his mind until closer to the vote. Republicans and Democrats will be holding separate party meetings before the vote.
Voting yes would bolster Senate Majority Leader Harry Reid's approach of not allowing Republican amendments, Grassley said in a brief interview in the Capitol.
"That's going to enhance what he's been doing," Grassley said.
Wyden said on Bloomberg TV that today's bill lets Congress focus on a broader revamp of the tax code that would lower the corporate tax rate and address the trend of inversion transactions, in which U.S. companies use mergers to move their legal addresses to lower-tax countries.
Wyden wouldn't answer directly when asked whether his broader tax bill should raise additional revenue for the government, as most Democrats insist.
Republicans prefer a revenue-neutral approach, where all the money gained from limiting tax breaks is used to reduce rates.
"When you create jobs, you generate growth, which generates revenue," Wyden said. "Some of this is Washington Beltway talk. The reality is pro-growth tax reform is going to generate revenue."
The bill is HR 3474.
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