One small step

Washington Post: We’re not fond of the any-port-in-a-storm style of lawmaking in Congress. Bills that should pass on their own strengths are cluttered with measures of dubious merit that otherwise couldn’t get approved. And sometimes, worthy legislation that can’t be reconciled between the two houses is attached to bills that must pass. It is in this latter category of necessary evil that extension of the production tax credit became law on Friday as part of the $700 billion federal rescue plan.

Tax credits for the nascent wind and solar industries are vital if those industries are to become commercially viable and help reduce the nation’s dependence on fossil fuels. The new law extends the credits for wind for one year and for solar for eight. But for much of this year, the tax provision was hung up in a protracted game of legislative ping-pong between the House and the Senate. Despite widespread support, repeated attempts at passage failed because of fights over how and whether to pay for the entire tax package in which the energy credits were bundled. The House insisted that the package be fully paid for. The Senate insisted otherwise and ultimately got its way.

Energy provisions

After the House rejected the rescue plan last week, Senate Majority Leader Harry M. Reid, D-Nev., saw an opening to get the tax package approved by attaching it to the Senate’s must-pass legislation. He succeeded by a vote of 74 to 25. The House followed suit on Friday, even though, of the $150 billion added to the bill, only $43.5 billion spread over 10 years was paid for with new revenue measures. The energy provisions were among those that Congress did end up paying for, to the tune of $18 billion, including by means of a requirement for brokers to report to the Internal Revenue Service the price paid for stock they trade. The goal is more accurate reporting and independent verification of capital gains by investors, who now self-report.

The path Congress used to get this result was not ideal, but the result is welcome.