Congress Nears Mega-Deal on Spending, Specialty Tax Breaks

Congressional negotiators were close Tuesday to reaching a year-end megadeal that would not only avert a government shutdown, but also secure a massive tax-break package that seemed a long shot just a few days ago.

First, however, Congress will need to pass another stopgap measure to keep the government open past Wednesday’s deadline while negotiators wrap up the final details.

“It’s decision time,” Senate Minority Leader Harry Reid, D-Nev., said as the Senate opened.

Top congressional leaders, including Reid and House Speaker Paul D. Ryan, R-Wis., have been in talks over a $1.1 trillion spending plan that would fund the government through Sept. 30.

Separately, leaders are also trying to broker a nearly $700 billion package of tax breaks — including specialty deductions for certain specific industries, and broader ones for business investments and depreciation.

The tax breaks are routinely renewed on a temporary basis, but this year, lawmakers want to make some of them permanent.

The year-end scramble has emerged as a proxy of sorts for a climate-change debate — with Republicans trying to lift a 40-year ban on exporting most U.S. oil, and Democrats seeking a robust extension of tax breaks for solar, wind and other renewable-energy development.

On the heels of the international climate deal reached in Paris, both sides are eager to stake out opposing positions. Democrats appear willing to yield on oil exports, but only for a price.

“We’ve made it clear: If they want this oil export ban (lifted), there must be included in this policies that reduce our carbon emissions,” Reid said.

Because the bills are among the last ones Congress will approve before their year-end recess, lawmakers are trying to load them up with priorities — creating two massive packages.

In many ways, the add-ons reflect the broader national debate. Republicans want to attach a measure banning Syrian refugees from entering the U.S., as a response to growing fears of terrorism. Democratic Minority Leader Nancy Pelosi is pushing to make permanent a child tax credit that she wants to link to inflation so that it grows most years.

Consensus also appears to be forming around including a bill that would restrict visa-free travel to the U.S. for visitors who have been to Iraq and Syria, as well as a cybersecurity bill that privacy advocates warn could result in domestic computer spying.

Support has also emerged for an extension of the compensation and health monitoring funds for victims and emergency workers of the Sept. 11, 2001 terrorist attacks.

Two taxes imposed under Obamacare could be repealed, including one on high-priced “Cadillac” insurance plans and another on medical-device manufacturers.

Less certain is the fate of the Land and Water Conservation Fund, which allows states to preserve parklands, but expired earlier this year.

Ryan, on a conference call with GOP lawmakers Monday evening, was optimistic that the final packages would be ready Tuesday, and he has vowed to stick by the chamber’s three-day rule to review legislation.

That sets up House passage no sooner than Thursday. The packages are likely to move as separate measures in the House, because Republicans are more inclined to support the tax breaks but oppose the spending bill, while the opposite is true for Democrats. Linking them could lead to defeat.

Deficit hawks in both parties have complained that Congress is piling on more red ink with the massive tax break package that is not paid for with budget cuts elsewhere.

Final passage could drag in the Senate if opponents filibuster. However, several top Republicans who are running for the party’s presidential nomination, including Sen. Ted Cruz of Texas, are scheduled to be away from Washington on the campaign trail.

To get through the week without a shutdown, Congress will need to approve a stopgap measure by midnight Wednesday, when funding runs out.

Even though President Barack Obama vowed not to sign any more temporary spending bills into law, he did so last week to allow the current talks to continue through Wednesday, and would likely sign another if a deal is close.