Lew: Avoid ‘wrong approach’ on tax breaks

Treasury Secretary Jack Lew said Monday that a deal to restore expired tax breaks that did more to help business interests than working families would be “the wrong approach.”

{mosads}Lew said that any agreement on the dozens of incentives known as tax extenders “must ensure that the economic benefits are broadly shared.” His statement echoed comments from the White House press secretary, Josh Earnest, who said Monday that reports about Capitol Hill negotiations over the preferences were “not promising.”

Republicans have been pushing for months to indefinitely extend some business-friendly tax breaks, like the popular credit for research and development and incentives for business expensing. Democrats have said that any discussions about long-term extensions must also include preferences for working families, like the Earned Income Tax Credit, the child tax credit and a preference to help defray the costs of college expenses.

The New York Times reported Monday that bipartisan negotiators were nearing a deal that would at least extend the research tax break, a business expensing provision and the college costs preference without an expiration date.

“There are reports today that Congress may be considering a potential deal on extenders that would do very little for working families and would be fiscally irresponsible,” Lew said in his statement. “An extender package that makes permanent expiring business provisions without addressing tax credits for working families is the wrong approach, at the expense of middle class families.” 

Senators from both parties have said they like a Finance Committee plan to extend almost all of the more than 50 provisions that expired at the end of 2013 until the end of next year. House Republicans have said, if negotiations falter, they might push for a deal to extend the preferences only until the end of 2014, putting the incentives back on the agenda for next year.

The IRS has warned that policymakers need to wrap up a deal quickly if they don’t want to affect the opening of next year’s filing season.