Texas taxpayers and industries will get a boost from the tax and spending bills lawmakers agreed to Wednesday morning, on everything from deducting sales taxes to lifting the crude oil export ban to ordering 11 more F-35 aircraft.
The House and Senate will be voting on the catch-all $1.1 trillion omnibus funding bill and the so-called tax extenders by Friday to keep the government operating through the 2016 fiscal year.
For Texas and the six other states without an income tax, including Florida and Washington, the tax extenders bill makes permanent a hard-fought tax break to give taxpayers who itemize the ability to deduct sales taxes on their federal income tax returns.
Then-House Majority Leader Tom DeLay, R-Texas, led the effort to restore the deductibility of sales taxes in 2004 but the provision – which allows taxpayers to choose to deduct either state income tax or state and local sales taxes — has periodically expired after being approved in one- or two-year increments.
“How can families and local businesses count on tax relief each year as long as Congress can’t decide what’s permanent and what’s not?” said newly installed House Ways and Means Committee Chairman Kevin Brady, R-Texas. “That confusion ends now, and our economy will be stronger for it. By delivering permanent tax relief, we’re making it easier for Americans to keep more of their own money, find new jobs, and increase their wages.”
Brady has been a long-time member of the panel and originally worked on the provision with DeLay.
Big day for Barton
Meanwhile, Rep. Joe Barton, R-Texas, chairman emeritus of the House Energy and Commerce Committee, finally saw his signature legislation realized, the lifting of the 40-year-old ban on domestic crude oil exports.
“Congressman Barton is thrilled this crucial legislation is included in the omnibus package,” said Barton spokesman Daniel Rhea.. “Lifting the ban on crude oil exports will be a major win for all Americans.”
With oil prices low, exports will help domestic producers, say advocates, and spur employment.
Sen. John Cornyn, R-Texas, who has worked on the issue in the Senate, said,“Ending the ban on crude oil exports will serve as a shot in the arm to a sluggish economy, and will open up new markets for job creators in Texas and across the country.”
Final passage is expected by Friday morning.
Democrats were less thrilled, although the opponents to lifting the ban – imposed in 1975 as a way of securing domestic supply – were meant to be mollified by the restoration of wind and solar energy tax credits in the extenders bill.
“Our members are curious to see what the renewable package is to offset the damage done by the exportation of oil,” said House Democratic Leader Nancy Pelosi, D-Calif. “But in a bigger sense, here we are – at a time when we want good-paying jobs, which we have here in our refineries, we’re shipping those jobs overseas. At a time when the whole world had gathered in Paris – the whole world, every country of the world, leaders of the world came together to go forward in how we reduce emissions, and reducing dependence on fossil fuels, we’re shipping crude oil overseas, increasing our dependence on foreign oil.”
In defense, the bill added an unexpectedly larger number of F-35s to the Pentagon budget. The House approved six of the next-generation aircraft, the Senate approved nine and the end result wound up at 11 of the aircraft made by Lockheed Aeronautics Co. of Fort Worth.
Part of the drive to order more F-35s, which added $1.3 billion for three versions of the aircraft, for the Marine Corps, Air Force and Navy, came about because of the Marines’ need to replace six Harrier jump jets destroyed in 2012 in Afghanistan. (British Harriers are no longer built.) And part of it came from lawmakers’ support, especially Rep. Kay Granger, R-Fort Worth, chairman of a House Appropriations Committee subcommittee and a former mayor of Fort Worth.
After years of criticism, said Loren Thompson, chief operating officer of the Lexington Institute and a consultant on defense issues, “the program’s in better shape than it’s ever been. It has broad-based political support.”
Greg Dahlberg, until recently Lockheed Martin’s former senior vice president of Washington operations, and now a consultant, said, “Granger was definitely a big part of it. This is no longer a hard-sell.”
Asked if Texas clout was a factor in reaching a larger number, instead of the more typical tact of splitting the difference, Richard Aboulafia, a Northern Va.-based military and commercial aviation analyst, said, “There’s always clout. Texas is always Texas. What’s different is the political climate has changed, shifting to national security.”
Christmas comes early for Texans in the new budget deal that was unveiled Wednesday. The sales tax deduction that put money in the pockets of every Texas household yet faced extinction every two years has been made permanent. And jobs are likely to be saved and created in the state thanks to a provision pushed in part by Joe Barton to end the ban on oil exports.