House-Senate energy tax conferees appeared on the verge of cutting the home insulation tax credit in half yesterday, but House Democrats decided at a lunchtime caucus such a move would betray a commitment to the public.
The conferees quit until Tuesday without voting.
Rep. Al Ullman (D-Ore.), chairman of the Ways and Means Committee and of the conference, said he believes a majority of House conferees will insist that the full credit voted last year by both bodies be paid to those who have already made an investment. A reduction could come later.
President Carter proposed tax credits as part of his energy package 17 months ago to encourage energy-saving investment in insulation and storm windows and doors. The House and Senate last year passed identical provisions providing a credit of 20 percent of the first $2,000 of expense, up to a maximum of $400 for persons who bought insulation after April 20, 1977. The credit would be subtracted from taxes owed.
It would be extraordinary, though in this case technically possible, for conferees to change a provision agreed to by both bodies. But when the conferees held their first working session of this year yesterday they were told by staff that the budget resolution setting limits on spending, revenue and deficits provides less money than they expected to give away in tax credits.
The staff estimated that when the big tax cut bill and other legislation in the pipeline have been passed there would be $300 million available for energy tax credits in the fiscal year starting Sunday.
Sen. Mike Gravel (D-Alaska) and others suggested that the home insulation credit that would cost an estimated $827 million in lost revenue next year be dropped. A number of members have argued all along that it is bad public policy to give tax credits to homeowners for doing what they should do in their own self-interest.
Russell B. Long (D-La.), leader of the Senate conferees, proposed cutting the credit in half and packaging that with a list of business energy credits costing more than $300 million next year. Ullman raised the question of whether Congress had a "responsibility" to give the credit to persons who have already spent money. But just before the lunch break he appeared ready to go along with a 50 percent cut.
At a luncheon caucus of House Democrats, Rep. Thomas L. Ashley (D-Ohio) and others reportedly argued vehemently that Congress by its actions last year had made a commitment to the public and could not turn around on it now.
When the conferees reconvened at 2 p.m. Long made a proposal that would have wiped out the residential insulation credit. He apparently had got wind of the tougher House attitude and was starting at zero in hopes of a compromise in the middle.