Congress on Verge of Deal on Spending to Avert U.S. Shutdown

(Bloomberg) — House and Senate lawmakers were on the brink
of an agreement on plans to fund the U.S. government and make
some expired tax provisions permanent as a deadline to avoid a
federal shutdown drew near.

House Appropriations Chairman Hal Rogers, a Kentucky
Republican, said Tuesday evening that lawmakers were “very
close” to a deal, “99 percent,” though he wouldn’t say what the
1 percent disagreement was. House Republicans plan to meet at 9
p.m. Washington time. Earlier, Rules Committee Chairman Pete
Sessions said a tentative agreement had been reached.

Current government funding is set to expire at the end of
the day Wednesday, and lawmakers will need to pass a stopgap
bill to avoid a shutdown while they debate the full-year bill.
Oklahoma Republican Tom Cole said remaining issues involve the
environment and financial services. The financial services
provisions are where assistance for financially troubled Puerto
Rico would be provided.

Sessions told reporters that leaders had reached a
tentative deal and that the plan would be presented to rank-and-file House members Tuesday night. House Speaker Paul Ryan’s
spokeswoman AshLee Strong disputed Sessions’ statement in an e-mail that said, “Negotiations continue and there is no deal
yet.”

Export Ban

Sessions wouldn’t discuss specifics, including whether
lifting a 40-year-ban on exporting crude oil would be part of
the deal. But he said, “as a Texan,” then smiled widely. He
spoke to reporters after leaving a closed-door meeting of House
Republican leaders, including Ryan. Sessions said he expected
the spending bill and tax package to be released after Tuesday
night’s House Republican meeting.

Senate Democratic leader Harry Reid said earlier in the day
that a dispute over the crude oil export ban was the last major
obstacle to an agreement. He said Republicans needed to decide
whether to accept environmental measures sought by Democrats in
exchange for lifting the ban.

“There will be a great meeting of our family. And people
will see things. And when that breaks we will post the text,”
Sessions said.

Policy Changes

Congressional negotiators have been working on the spending
bill and an accompanying package of as much as $750 billion in
tax breaks for businesses and low-income workers. A resolution
was delayed by disagreements over a variety of policy changes
sought by Republicans, including lifting the oil export ban.

“I think we’ve been pretty clear we’re not going to have a
shutdown,” Ryan of Wisconsin said earlier Tuesday during a
Politico event.

The deal being discussed would lift longstanding trade
restrictions on U.S. crude oil exports in exchange for extending
renewable energy tax credits and allowing the U.S. to pay into
an international fund to help developing countries cope with
climate change, three energy industry lobbyists familiar with
the negotiations said earlier Tuesday.

U.S. oil producers, including Continental Resources Inc.,
Pioneer Natural Resources Co. and ConocoPhillips, have been
pressing for an end to the trade restrictions that block exports
of most raw, unprocessed crude but don’t restrict foreign sales
of gasoline, diesel and other refined petroleum products.

Wind Power

Lawmakers were near agreement on a plan that would extend a
production tax credit used by wind power developers for five
years, the lobbyists said. A similar five-year extension would
be allowed for the solar investment tax credit, which covers 30
percent of the qualified costs associated with those projects,
they said. The 50-year-old Land and Water Conservation Fund,
which helps pay for land acquisitions and expired in September,
also would get a two-year extension.

President Barack Obama opposes legislation lifting the
crude oil export ban but doesn’t rule out letting such a
provision survive in a final spending bill, White House
spokesman Josh Earnest told reporters. The White House has
“acknowledged an omnibus bill will be a compromise,” Earnest
said.

Fiduciary Rule

Cole said the final plan won’t include a Republican
proposal to block the Labor Department from completing a
proposed fiduciary standard for brokers who give advice on
retirement money. The standard would require such brokers to put
their clients’ best interests first. Large banks such as Morgan
Stanley, Citigroup Inc. and Wells Fargo & Co., as well as mutual
fund companies, independent brokers and insurers, have sought to
kill the fiduciary rule.

Second-ranking House Democrat Steny Hoyer raised objections
to the tax-extension measure even though he said it would make
permanent an expansion of the earned income tax credit and the
child tax credit — both priorities for Democrats. It also would
continue tax breaks for business research and investment as well
as charitable contributions, he said.

Hoyer of Maryland said he opposed the plan because its cost
wouldn’t be paid for, citing a “misguided double standard that
investments in the growth of jobs and opportunities must be
offset, but tax cuts are always free.”

To contact the reporters on this story:
Billy House in Washington at bhouse5@bloomberg.net;
Kathleen Miller in Washington at kmiller01@bloomberg.net;
Erik Wasson in Washington at ewasson@bloomberg.net

To contact the editors responsible for this story:
Jon Morgan at jmorgan97@bloomberg.net;
Craig Gordon at cgordon39@bloomberg.net
Laurie Asseo, Michael Shepard

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