BIOFUELS & HEALTH INS REFORM

How Biofuel Leaked Into the House Health Bill
David M. Herszenhorn, November 8, 2009 (NY Times)

"At first glance, it might seem as if House Democrats were so overwhelmed by their ambitious legislative agenda that they confused their big climate change legislation with their big health care bill.

"A package of last-minute changes to the Democrats’ health care bill…included a curious tax provision related to the production of biofuels, including ethanol. By changing some of the rules related to tax credits for biofuel manufacturers, the provision would raise about $24 billion in additional tax revenue from the biofuel companies over 10 years."

From a January 2009 report by the Environmental Working Group (click thru for the report)

"So what do biofuel producers have to do with health care? Actually, nothing. The change was all about the money… “Pay-for” and “revenue-raiser” …are just fancy ways [in Congress] of describing a tax: something that “pays for” legislation, or “raises revenue” to pay for legislation…But good revenue-raisers are hard to find. And when one is available, lawmakers often fight over it…Senate Democrats swiped a revenue-raiser that House Democrats had included in their health care legislation: a delay in a tax code change, which would result in multinational corporations’ paying $26.1 billion in taxes over 10 years that they would otherwise be spared…

"[T]hat move left a hole in the House Democrats health care bill…The solution was a change in the “second generation biofuel producer tax credit” which will make up most of the money taken by the Senate…[It] means some biofuel producers will receive less in tax credits than under current law. (The House also retained a limited version of the tax code change for multinational companies, which will generate $6 billion for the health care bill.)"

Health insurance reform has reformed biofuels subsidies. (From a January 2009 report by the Environmental Working Group - click thru for the report)

"Representative Chris Van Hollen, Democrat of Maryland, who sponsored the biofuel amendment on behalf of the House Democratic leadership, said that it was both a good way to raise money and an improvement in alternative energy policy that Democrats would have carried out anyway…[and] the Senate’s swipe of the tax provision…left the House no choice but to find more money….

"Such a tug-of-war over revenue-raisers is hardly unusual in Congress. But…[this one] highlights how increasingly difficult it has become for lawmakers to generate revenue without imposing new taxes that will be felt directly by the constituents who elect them. President Obama’s promise not to raise taxes on Americans earning less than $250,000 a year has made that challenge even harder…"