by Mitch Kokai
Senior Political Analyst, John Locke Foundation
Advocates of the “Green New Deal” … want to use the tax code to put in place most of their domestic policy goals for a simple reason — there is a workaround to the Senate’s hoary super-majority impediments called “budget reconciliation.” Under these rules, which have been used by both parties to advance everything from Obamacare to the Trump tax cuts, a simple Senate majority is all that’s required to pass entitlement spending and tax legislation, provided the deficit is not increased outside the budget window. Democrats are sure to include enough tax increases to more than offset “Green New Deal” junk tax credits, so reconciliation is an attractive option. Why make 60-vote law when you can accomplish the same goal with a 51-vote tax bill?
That strategy emerged not once, but twice, in the past couple of weeks. The first is a catch-all “Green New Deal” plan called the “Moving Forward Act,” a kind of “Contract with America” for radical environmentalists. The second was a more conventional highway funding reauthorization pork-barrel bill, but it contained a raft of green tax credits and other tax code atrocities.
By way of example, each of these bills contains an extension of the supposedly-phasing out investment tax credit, which provides tax breaks for the purchase of green energy equipment such as solar panels and geothermal converters. They also want to expand the investment tax credit to include energy storage devices. The bills would extend this expanded tax credit to 2025.
The investment tax credit began in 2005 as a “temporary” market support to then-emerging green energy providers. It was supposed to wind down by 2015 but was extended all the way to 2021. … By advocating a further extension to 2025, congressional Democrats have made it clear they never want the credit to go away.