Last week, Sens. Maria Cantwell and John Ensign introduced the Clean Energy Tax Stimulus Act of 2008 as an amendment to H.R. 3221, the New Direction for Energy Independence, National Security and Consumer Protection Act.
The CETS Act, at a cost of around $6 billion, would extend the Production Tax Credit for one year. The credit reduces the tax liability for companies that generate power from renewable sources such as hydropower, wind, biomass, etc. It also would extend for eight years a tax credit for investment in solar energy and credits for energy efficient homes, commercial building and appliances.
Unfortunately, the amendment is facing some hurdles.
The $6 billion cost of the amendment doesn't have an offset; that is, it doesn't raise taxes or decrease spending someplace else to pay for the bill's costs. While this isn't so much an issue in the Senate, it will be in the House where Democrats have been fairly insistent on following PAYGO rules.
PAYGO, or pay-as-you-go, is pretty much what it sounds like. When the Congress convened in January 2007, one of the first things the House did was pass H. Res. 6. The House's PAYGO rule requires that legislation affecting spending or revenues (the stuff we take in via taxes) must not increase the deficit (or reduce the surplus) in the current or following five fiscal years.
Of course, like so many other rules, PAYGO can be broken. The House's rule isn't self-enforcing; a member must raise a point of order against a bill. And even that can be gotten around by some parliamentary procedures (if the nerd within is yearning to know the exact details, I invite to you read the Congressional Research Service's report).
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