Some House Ways and Means Committee Democrats are open to a slimmer, less expensive package of expired tax breaks—a strategy could make the fractious process more palatable to detractors.

That effort could have some appeal in the House, where extending temporary tax breaks typically has had less support than in the Senate. But it remains to be seen whether Ways and Means Chairman Richard Neal (D-Mass.) would be able to thin the extenders package.

A slew of perks expired at the end of 2017—among them are a credit for biodiesel backed by Senate heavyweights like Finance Committee Chairman Chuck Grassley (R-Iowa) and a credit for short-line railroad track maintenance that lawmakers have sought to make permanent in previous piecemeal bills.

The extenders issue has been hanging over the tax-writing committees since last Congress. Finding a way to check it off would mean lawmakers could move to other issues, like debating technical corrections to the 2017 tax overhaul.

By floating a list of extenders that shouldn’t be renewed, Neal could gauge whether any of them lack vocal or strong enough constituencies to push back, a former Senate staffer said. That exercise could enable the committees to shape a package that might work in both chambers and prepare for an opportunity where the perks could be attached to a must-pass bill.

Rep. Mike Thompson (D-Calif.), chairman of the Ways and Means Select Revenue Measures Subcommittee, said recently that he expects the committee to discuss which of the breaks can be ditched.

At least for now, the Senate is making similar noises.

“Are they still needed? Are there reforms since they were enacted that we should be putting in place because the purpose has evolved? Should they be phased out?” Mark Warren, chief tax counsel for Senate Finance Republicans, said at a Washington conference May 30.

Different Paths

The House and the Senate are going to have different paths in getting to agreement on an extenders package, said Dean Zerbe, a former Republican senior staffer on Senate Finance.

“The ‘scrubbing’ may have some effect as members take a hard eye at the provisions and supporters need to re-justify the extension,” Zerbe said in an email. “In the past, I’ve seen one or two tax extenders get dropped or altered in these exercises as they get put through their paces.”

In February, Grassley and Sen. Ron Wyden (D-Ore.), the top Democrat on the finance committee, introduced their own standalone extenders legislation (S. 617) as a signal to the House of their urgent interest in passage an extenders package.

If the House passes an extenders package with fewer than the 29 proposed in the Senate’s bill, Grassley would see that as a basis for discussion, a GOP Senate aide told Bloomberg Tax.

Although it is hard to get rid of the breaks, it might be possible to suggest that some of them be phased out, a former top Democratic Ways and Means staffer said.

Influential industries that benefit from the tax breaks want to make them permanent, and have pressed the issue with lawmakers.

Permanency would be ideal, but sometimes it is only feasible to extend provisions for one or two years at a time, said Chuck Baker, president of the American Short Line and Regional Railroad Association.

“Anytime we can have the credit extended for a year, we’ll take that and make the investments and live to fight another day,” he said.

The tax code Section 45G maintenance credit is one that lawmakers have been trying to make permanent. Ways and Means member Earl Blumenauer (D-Ore.) introduced a bill (H.R. 510) in January that now has more than 200 House cosponsors. Companion legislation in the Senate (S. 203), introduced by Finance member Mike Crapo (R-Idaho), has more than 40 cosponsors.

Kurt Kovarik, vice president of federal affairs at the National Biodiesel Board, said he was hoping to see an extenders bill this month.

“We need the House to produce a bill and pass through the House and indicate their position on extenders in order to have that conversation and negotiation,” he said.

Several Ways and Means Democrats, including Rep. Lloyd Doggett (D-Texas), also want the extenders to be paid for, and are continuing to negotiate what offsets they will propose. One initial draft on the House side pays for the extenders through 2019 by putting an early end to the 2017 tax law’s expanded estate tax exemption.

Bipartisan Opposition

The circus around renewing tax extenders has spawned some vocal critics.

Marc Goldwein, senior vice president and senior policy director at the Committee for a Responsible Federal Budget, said “The right way to scrub them out at this point is to let them stay dead. The extenders expired almost 18 months ago now, that was by design.”

The longer extenders remain expired, the more likely they are not to come back, Goldwein said. Still, he said he could see an extenders package being attached to must-pass legislation later in the year.

CRFB was among the groups that wrote to congressional leaders in May asking them to let the tax breaks stay dead. The diverse organizations that signed on to the letter included the Tax March, which calls for heavier taxes on the wealthy, and Americans for Prosperity, which is part of the Koch network.