By CongressDaily staff,
© National Journal Group Inc.
Monday, Feb. 25, 2008

After a week away from Washington, lawmakers return to the Capitol today and will look to legislation they hope will address the economy, an issue increasingly on their own and their constituents' minds. But members will contend with intense negotiations over the farm bill, rewriting the nation's intelligence laws and looking for troop withdrawals in Iraq.

House Democrats this week will renew a floor fight over paying for billions of dollars in renewable energy and efficiency tax breaks by repealing incentives for oil and gas companies.

The roughly $18 billion proposal is similar to legislation the House approved last year and will likely be on the floor Wednesday. The Rules Committee is scheduled to meet on the bill Tuesday. While House passage is expected, its prospects in the Senate are far less certain. Senate Republicans last year blocked efforts to repeal oil and gas industry incentives. Even if the measure does get 60 votes in the Senate, it would probably face a veto threat. The White House threatened to veto a $16 billion House energy tax bill in August.

There is widespread support for extending renewable energy and efficiency tax credits that expire at the end of this year. The renewable industry says Congress needs to extend them early this year to preserve jobs and pending projects. But the problem of how to pay for these incentives remains the main obstacle.

Regardless of whether the bill gets through Congress this year, it could be used for political advantage in the elections. Gas prices are usually lumped with the larger issue of the economy, which has emerged as the top issue heading into the November vote.

Supporters of the House bill point to record profits for major oil and gas companies as gasoline prices remain more than $3 per gallon in many areas and crude oil prices have hovered around $100 per barrel. Critics say tax increases on the companies will only exacerbate consumer prices and harm domestic production at a time when the U.S. economy is struggling.

Senate Democrats will attempt to bring up this week a housing stimulus package of direct aid and consumer-friendly initiatives to help the struggling industry, though they first want to finish work on an Indian health care bill and revisit Iraq war legislation.

After the Senate finishes up work on the Indian health care bill, they will hold cloture votes on Iraq war legislation.

A spokeswoman for Senate Majority Leader Harry Reid, D-Nev., said the votes were expected to be on whether to proceed to debate on troop redeployment legislation sponsored by Sen. Russell Feingold, D-Wis., and another addressing al-Qaida. Those votes could happen as soon as Tuesday, the spokeswoman said.

The housing measure would provide $200 million in funding for counselors to reach families at risk of losing their homes and find options so they can stay in their residences -- and would allocate $4 billion in Community Development Block Grant funding for cities to purchase and rehabilitate foreclosed properties.

It would include tax measures to raise by $10 billion the cap on mortgage revenue bonds so housing finance agencies could refinance troubled home loans; and allow companies to write off recent losses over a longer period of time, enabling them to claim refunds of taxes paid in previous, profitable years.

Democrats sense the issue resonates politically as Sens. Barack Obama, D-Ill., and Hillary Rodham Clinton, D-N.Y., have outlined plans to stem mortgage foreclosures.

A spokesman for Senate Minority Leader Mitch McConnell, R-Ky., said Republicans have not decided on whether to oppose a Tuesday cloture vote so the chamber may proceed to the bill.

But passage of the measure is not expected, especially because it includes language to allow bankruptcy judges to restructure some risky home mortgages on the verge of foreclosure, a provision bitterly opposed by mortgage lenders.

This week will see likely action in both chambers on a 10-month renewal of expiring trade preferences for Colombia, Peru, Ecuador and Bolivia, collectively known as Andean trade preferences.

The program allows most products from those countries to enter the United States duty-free. Begun in the 1990s to try to wean those nations' agricultural economies away from illegal drug production, Andean preferences has been a success by most measures but has run into political headwinds in recent years surrounding the free-trade debate.

It has been subject to short-term extensions in recent years, creating uncertainty for businesses operating in those countries, and the program is set to expire Friday.

Earlier this month, House Ways and Means Chairman Charles Rangel, D-N.Y., agreed to scale back a comprehensive bill extending several expiring preference programs until Sept. 30, 2010, in negotiations with Ways and Means ranking member Jim McCrery, R-La.

McCrery and other Republicans want to keep up the pressure on Democrats to relent and support the United States-Colombia free trade agreement; the Dec. 31 expiration date means Democrats will have to revisit Andean and other preference programs later this year, perhaps in a lame-duck session after the election.

Democrats are making no promises on Colombia. In fact, labor opposition to the deal appears to be mounting. Trade Representative Schwab will make her pitch for the Colombia deal Wednesday during a keynote speech for the Woodrow Wilson International Center for Scholars Conference.

The House might take up the Andean preferences measure as early as Tuesday on the suspension calendar. Senate action remains unclear as Senate Finance ranking member Charles Grassley, R-Iowa, has kept his intentions under wraps.

In addition to his desire to see the Colombia trade deal go through, Grassley has made no secret of his distaste for past actions by the governments of Ecuador and Bolivia he and other Republicans deem anti-American.

Last year, he agreed to an eight-month extension of Andean preferences, allowing it to go through in the final hours before expiration. Aides and lobbyists are predicting Grassley might make supporters sweat it out in a similar fashion this week before releasing the bill.

The Senate meets today at 3 p.m. and proceeds to the reading of Washington's Farewell Address. Afterward, consideration of the Indian health care bill resumes.

The House meets today at 4 p.m. for legislative business. Recorded votes will be postponed until approximately 6:30 p.m.

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