WASHINGTON—Congressional negotiators are close to reaching a year-end megadeal that would not only avert a government shutdown, but also lift a 40-year ban on U.S. oil exports and make permanent a sweeping package of specialty tax breaks.
House Speaker Paul D. Ryan, R-Wis., and his Senate counterpart, Majority Leader Mitch McConnell, R-Ky., were optimistic that the final deal would be ready for swift passage in the House and Senate by Thursday.
“Anybody who wants to stay here and eat up more of our Christmas holiday could do that, but at some point we’re going to have to vote and I would think people would be incentivized to try and take care of our business this week,” said Sen. John Cornyn, R-Texas, the majority whip.
Top congressional leaders, including Ryan and Senate Minority Leader Harry Reid, D-Nev., are racing against a Wednesday deadline to approve a $1.1-trillion spending plan to fund the government through Sept. 30.
Lawmakers are expected to pass another short-term extension to give them a few more days to finalize the deal.
Under a separate but related deal, leaders are also trying to broker a nearly $700-billion package of tax breaks—including specialty deductions for the film industry, schoolteachers and thoroughbred racehorse owners, and broader ones for business investments and depreciation.
The year-end scramble has emerged as a proxy of sorts for the national debate over climate change and broader concerns over national security.
Republicans are pushing to lift the long-standing ban on exporting most U.S. oil, a legacy of the 1973 Arab oil embargo that led to long gas station lines and higher prices at the pump. Now, with prices falling and production rising, major oil companies want the ban reversed to open up new international markets.
In return, Democrats are seeking a robust package of green-energy incentives, including a five-year extension of tax breaks for solar, wind and other renewable energy development. They also want to renew a Land and Water Conservation Fund that is used to protect parklands but has expired, and to launch a new oceans conservation fund to tap oil revenues for marine protections.
“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 recessing for the holidays, lawmakers are trying to load them up with priorities—creating two massive packages.
Details of the final agreements were expected to be announced later Tuesday night. The negotiations follow a bipartisan budget deal reached last fall to boost funding for domestic and defense programs. The final add-ons now being proposed by both parties reflect the broader political debate, and neither side is getting everything it wanted.
Republicans backed off their effort to attach a measure that would effectively block Syrian refugees from entering the U.S., a response to growing fears about domestic terrorism. Instead, consensus appears to be forming around a bill that would ban visa-free travel to the U.S. for most foreigners who have recently visited Iraq and Syria.
A cybersecurity bill that privacy advocates warn could result in domestic computer spying may also be included. And support has emerged for an extension of the compensation and health-monitoring funds for victims and emergency workers of the Sept. 11, 2001, terrorist attacks.
House Democratic leader Nancy Pelosi of California is pushing to make permanent a child tax credit that she wants to link to inflation so that it grows most years. But Republicans have proposed eligibility restrictions that Democrats, including the White House, have rejected.
Two soon-to-take-effect taxes imposed under Obamacare could also be postponed, one on high-priced “Cadillac” tax plans and another on medical device manufacturers.
Gone are Republican provisions to restrict access to abortion services or ban funding to Planned Parenthood. Democrats appeared to have given up on their effort to reverse a ban on using federal funds for gun-violence research.
Still unclear was whether a measure to help Puerto Rico out of its debt crisis would be included.
Ryan, who gathered rank-and-file Republicans for a meeting late Tuesday, 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 together 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.
