(Bloomberg) Congress passed a $1.1 trillion spending measure that extends a number of important tax provisions, and makes several of them permanent.
The Senate passed the bill 65-33 on Friday, shortly after a 316-113 House vote. The legislation, which will finance the government through September 2016, goes to President Barack Obama, who plans to sign it.
The two measures, combined in H.R. 2029, include about $680 billion in revived tax breaks over the next 10 years. A number of them would be made permanent, including those for business research and development, small business expenses, individual deductions for state and local sales taxes, and financing rules for multinational corporations.
The research tax break will be “a booster shot for the innovation economy in America,” said Senator Ron Wyden of Oregon, the top Democrat on the Finance Committee.
“Let’s take steps -- as the legislation we’ll consider proposed -- to support more jobs, more opportunity, and more economic growth,” Senate Majority Leader Mitch McConnell, a Kentucky Republican, said on the Senate floor. “I think it’s legislation worth supporting.”
The tax provisions
The tax-extension measure passed by the House Thursday would also make permanent an enhanced Child Tax Credit and the Earned Income Tax Credit, both Democratic priorities, as well as tax breaks for charitable giving and schoolteachers’ expenses.
The two pieces of legislation would suspend three taxes intended to fund the Affordable Care Act -- a so-called Cadillac tax on high-cost health insurance plans would be delayed from 2018 to 2020; a 2.3 percent tax on medical devices would be paused in 2016 and 2017; and a fee on health insurers would be paused for 2016.
Not everyone was on board. West Virginia Senator Joe Manchin, a Democrat, said on the Senate floor Thursday that he planned to oppose the bill because of the amount it would add to the federal deficit.
“I cannot stand here and vote for a bill that tells middle- class Americans, students and veterans, doctors and nurses, mothers and fathers and our seniors that these are our values,” Manchin said. “I would hope we would all think twice before voting for this absolutely unresponsible, irresponsible piece of legislation that adds another $700 billion to the debt.”
The legislation also ends a 40- year-old ban on crude oil exports.
“They had to put big oil in the omnibus” to get the spending measure passed, House Minority Leader Nancy Pelosi told reporters Friday before the vote. Democrats had wanted the oil provisions to be added to the tax proposal instead.
Conservatives were unhappy when the final version omitted some policy provisions they wanted, including defunding Planned Parenthood and blocking Syrian refugees from entering the U.S.
Senator Ted Cruz of Texas, a Republican presidential contender, criticized Republican leaders in an opinion article in Politico that said the bill “effectively forfeits our massive Republican victories of 2014 and cements Obama’s priorities for nearly the full remainder of his term.”
In a letter Thursday urging fellow Democrats to support the spending bill, Pelosi wrote, “Personally, I was dismayed by Republicans’ insistence on lifting the oil export ban.” But she said Republicans’ “desperate thirst for lifting the oil export ban empowered Democrats to win significant concessions throughout the omnibus, including ridding the bill of scores of deeply destructive poison pill riders.”
For more on specific provisions of the law, see "The Tax Extenders in Detail."
--With assistance from Kathleen Miller and James Rowley.
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