Senate Sends Energy Tax Credits Back to House

Written by Ucilia Wang

The U.S. Senate on Wednesday night approved renewable-energy tax credits along with a mammoth package to rescue the beleaguered financial market.

By a vote of 74-25, the Senate extended roughly $18 billion worth of tax credits for businesses and residents investing in renewable energy, from building and operating power plants to installing small wind turbines on residential properties.

Both the Senate and the House of Representatives have tried and failed numerous times this year to extend the energy tax incentives, which are set to expire at the end of 2008.

The Senate passed the same tax credits for solar, wind and others that it had voted for last week. The House of Representatives then modified the Senate bill and passed the new version a few days later. The Senate was unhappy with the House version, however, and had refused to consider it.

The House's Monday rejection of the $700 billion plan to prop up the ailing financial market -- prompted by bankruptcy filings and sales of troubled U.S. investment banks and mortgage lenders -- gave the Senate an opportunity to push for its own renewable-energy bill again.

Senate majority leader Harry Reid, D-Nev., announced Tuesday night that the Senate would tweak the House's version of the financial-market bailout package and vote on it, but only along with the renewable-energy tax credits (see page 113 on the Senate's official online version of the bill). Along with the renewable-energy tax credits are a slew of other tax incentives for education, family and businesses, as well as hurricane relief. Overall, the tax incentives approved by the Senate are worth about $150 billion, reported the New York Times.

The Senate also voted to increase the amount of bank deposits covered by the Federal Deposit Insurance Corp. to $250,000 from $100,000.

The House is scheduled to consider the bailout package and the tax credits Friday.