Double VetoFebruary 27, 2008 - by Donny Shaw
Congress’s work this week is shaping up to be mostly in vain. As Dana of OMB Watch points out, the Bush administration announced yesterday that the President will veto both of the major bills being debating in Congress this week unless their core proposals are fundamentally altered.
Energy bill veto
The House today is beginning debate of H.R. 5351, the Renewable Energy and Energy Conservation Tax Act, which would eliminate tax breaks for the oil and gas industry while boosting incentives for renewable energy programs. The administration’s full veto threat can be viewed by clicking here (pdf); below is an excerpt:
>Specifically, the Administration strongly opposes the bill’s repeal of the manufacturing deduction for a segment of a single industry. This targeted tax increase would reduce the Nation’s energy security rather than improve it. Industries should be taxed on a level playing
field, and that field should be leveled by lowering rates, not by raising them; such increases would create an even greater disadvantage with respect to foreign competitors.
>Finally, the Administration strongly opposes the bill’s inclusion of $5.6 billion in expensive and highly inefficient tax credit bonds for renewable energy production and conservation efforts. Current law already provides sufficient Federal assistance to encourage these efforts. Such bonds also conceal the bill’s true cost, since they can result in forgone Federal revenue outside the 10-year congressional enforcement window. The Administration has serious concerns about proposals to allow stripping and separate sales of Federal tax credit benefits, which would run counter to efforts to deter tax motivated transactions and improve tax compliance.
Foreclosure/housing stimulus veto
Later this week, the Senate will be taking up S.2636, the Foreclosure Prevention Act of 2008. The bill’s primary purpose is to allow bankruptcy judges to renegotiate mortgages for homeowners who are facing foreclosure as a result of a subprime mortgage. The administration’s veto threat (pdf) goes straight to the heart of the bill. Here’s an excerpt:
>The Administration strongly opposes providing bankruptcy judges with power to modify the terms of mortgages for debtors in bankruptcy proceedings. Amending the bankruptcy code in this manner would undermine existing contracts, leading to contraction in mortgage credit
availability and affordability. These and other bankruptcy-related provisions in the bill would rewrite long-standing tenets of bankruptcy law in ways that would fundamentally alter the expectations of parties to hundreds of thousands of home purchases after the fact. These provisions would also likely prolong the time it will take the market to recover from the current
UPDATE: Senate Majority Leader Harry Reid (D-NV) said today that he is going to push forward with this bill, even if it’s ultimate end is a veto. The Politico has a great article on the politics involved in his decision.