White House vows to veto tax breaks

WASHINGTON – The White House is working feverishly to scuttle a congressional effort to permanently renew generous tax breaks for businesses and individuals, saying a plan brewing on Capitol Hill favored corporations over the working class.

Speculation on Capitol Hill on Tuesday focused on a potential agreement to permanently enact tax breaks on business investments in new equipment and research and development as part of a plan that would renew dozens of expired tax breaks for businesses and individuals both.

The White House immediately weighed in with a veto threat, saying Congress should also make permanent a top Obama administration priority, extending more generous tax credits for the working poor and people with children. They were left out of the potential pact and expire at the end of 2017; Democrats fear they won’t be renewed if Republicans control Congress or retake the White House.

The White House veto threat appeared to put the proposed deal on ice, though negotiations will continue.

At issue are dozen of expired tax breaks, known as “extenders” in Washington parlance. They are generally renewed every year or two and have broad political backing from both Democrats and Republicans. They expired last year and action now would extend them retroactively.

In trade-offs that angered the administration but gave political wins to top Senate Democrats, the emerging pact would also have made permanent tax breaks for college tuition, parking and transit subsidies, and a deduction for state and local sales taxes.

The cost of the outline under consideration could have reached $450 billion over the coming decade and would have been financed entirely by adding to the $17.9 trillion national debt.

Dozens of other tax perks would have been extended through the end of next year, including breaks for improvements at NASCAR tracks, race horse owners and manufacturers of electric motorcycles. Other extenders include tax credits for biodiesel, a tax credit for coal produced in Indian country, and breaks for energy efficient homes and commercial buildings.