Congressional leaders are working toward a deal to lift the federal ban on oil exports, a Republican priority, in exchange for extending tax credits for renewable energy, prized by Democrats.
The deal would tie together the massive government spending bill needed to avoid a goverment shutdown and legislation, until now negotiated separately, on a package of expired tax breaks that also must be re-upped before the end of the year to avoid large tax increases on businesses and families.
Republican Senate Majority Whip John Cornyn said Tuesday that Republicans were seeking to lift the 40-year old ban in the omnibus spending bill or the package of tax breaks, known as "extenders."
"It looks increasingly like those two are becoming conflated in a single negotiation," the Texan told reporters outside his office in the Capitol. Democrats, he added, "want the sun and the moon" in return for lifting the ban.
Sen. John Thune of South Dakota, the Republican conference chairman, said there was some Democratic support for such a swap, although it wasn't clear whether it would make it into the year-end bills. It was "still under consideration," he said, with discussions about phase-outs for some of the credits.
Trading an extension of the renewable energy tax credits for lifting the oil export ban would pit conservative priorities against one another. Conservative Republicans have pushed in particular for an end to the wind energy production tax credit, a subsidy for wind power that has been extended year after year, at a cost of $6.4 billion last year.
On Tuesday, two critics of the credit in the House, Mike Pompeo of Kansas and Kenny Marchant of Texas, wrote to House Speaker Paul Ryan and Majority Leader Kevin McCarthy asking them not to extend the wind tax credit. "[We] urge you to stand firm in opposition to extending this provision and allow wind energy to compete on its own," they wrote.
Steny Hoyer, the House Democratic whip, said Tuesday that lifting the crude oil export ban was "still on the table," although he was vague about what Democrats would ask for in return.
"That is the sort of thing where I think we think that is not where we want to go, but, on the other hand, if there were substantial agreements by the Republicans on some things that we thought were very good, then it might be something," Hoyer told reporters.
Congress must pass spending legislation by Friday to avoid a government shutdown. Whether that is a stopgap measure to allow more time for negotiations or a large-scale bill funding all agencies and including policy riders remains to be seen.
Meanwhile, tax writers are negotiating over a potential large deal on the extenders package that would end the cycle of extending temporary tax provisions and would make popular ones permanent. They also have put out legislation re-upping the breaks for just two years in case that effort falls short. On Tuesday Senate Majority Leader Mitch McConnell said he favored the "more robust" option.