One of the important agenda items for the lame duck session of the 112th Congress is the extension of the Production Tax Credit (PTC) for wind energy. The PTC is set to expire December 31 and Congress estimates that extending it for one year will cost about $12 billion. I’ve written on it repeatedly.
It has been expected that during the lame duck session, PTC supporters will try to tuck an extension of at least one year into a bigger tax-extender package filled with provisions the fiscally-conservative, small-government Republicans support, therefore pushing them to acquiesce and let the PTC extension go through. Extending the PTC would have required some shenanigans, as it has been defeated at each of five previous extension attempts in the past 12 months. According to a report in The Hill, “fiscal conservatives say the deficit situation means things like the wind credit must be sacrificed.”
However, in a post November 6 America, several things have changed that prompted me to pen one more post on the PTC.
Because of their fiscal conservative inclination, Republicans have repeatedly blocked the PTC extension.
Pre-election, Republicans held 47 Senate seats out of 100. Corralling all 47 Republicans and 4 Democrats and/or Independents to stand together in opposition to the extension was difficult—but not impossible. Post-November 6, there are now only 45 Republican members. Every out-of-party vote needed decreases the odds that the PTC will be allowed to expire—probably doubling the difficulty. The difference between 6 and 4 Senate Democrat votes doesn’t sound like a big difference to the casual observer, but it greatly shifts the odds in favor of the PTC extension in the Senate.
House Republicans held a hard line stance on matters such as the PTC, expecting to be in a stronger majority position after the 2012 election. As November 6 proved, they actually lost seats. With fear of losing their majority a looming concern in 2014, they will be loath to be portrayed as the ones holding up progress. Now, they are more amenable to political compromises—such as going along with an unfortunate PTC extension.