U.S. lawmakers are trying to make a deal to extend dozens of lapsed tax breaks through 2015 and make a few of them permanent, said two Senate Democratic aides and a House Republican aide.
Negotiators have made some progress toward an agreement, the aides said. That doesn't mean a deal can come together and become law, and it faces major hurdles.
House Republican leaders are instead looking at a one-year retroactive extension that would last through Dec. 31, 2014, a leadership aide said.
Lawmakers have little time left. Congress will finish its work for the year as soon as Dec. 11, and the Internal Revenue Service has warned that delays could slow tax refunds in January.
The talks are aimed at resolving a stalemate over the so-called tax extenders, a collection of miscellaneous tax breaks that expired at the end of 2013. The idea being discussed would let each party make some of its favored tax breaks into permanent law.
Republicans in Congress want to lock in a research and development tax credit and a break that lets small businesses write off more capital investments immediately, rather than spreading the write-offs over time.
Democrats are focused on expansions of the child tax credit and earned income tax credit that are scheduled to lapse at the end of 2017.
The deal isn't complete, said the aides, who spoke on condition of anonymity to describe the private talks.
The short-term bill being contemplated by House Republican leaders is unacceptable to Democrats, who see that as a back-door way of killing their priorities, because Republicans will control both chambers of Congress starting in January. Democrats are especially worried about the fate of the production tax credit for wind energy.
Asked whether negotiators were making progress, Republican Representative Pat Tiberi of Ohio today said, "Baby steps."
Tiberi, a senior member of the Ways and Means Committee, told reporters in the Capitol that he wanted to make some tax policies permanent and extend the lapsed breaks for as long as possible.
"Long-term certainty is something I hear about all the time from our job creators," he said.
The list of expired breaks includes some provisions with bipartisan support, including the deductibility of state income taxes. Others — such as accelerated depreciation for motorsports tracks — occasionally draw bipartisan scorn as corporate welfare.