• Saturday, February 18, 2012
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Tax-Breaks Legislation Hitches a Ride on Bailout Bill

Washington — The U.S. Senate has attached a package of tax benefits to must-pass legislation to rescue the troubled financial sector, increasing the odds that the expired benefits could be renewed this year.

The package newly added to the bailout bill, which the Senate is expected to take up later today, would extend for two years a tuition tax deduction, a research-and-development tax credit, and an IRA rollover for charitable contributions.

Earlier this week, the tax-breaks legislation appeared to be in limbo, as the Senate and the House of Representatives had passed similar but not identical versions of bills to renew the benefits. The two chambers had differed chiefly over how the benefits would be paid for.

The addition of the tax benefits is expected to make the rescue bill more appealing to House Republicans, two-thirds of whom voted against the bailout on Monday. But the move could alienate conservative, “Blue Dog” Democrats in the House who voted for the original bill. The “Blue Dogs” oppose extending the tax credits unless they are paid for with spending cuts or tax increases.

The House recessed on Monday for the Jewish New Year, but plans to return on Thursday to take up a bailout bill. —Kelly Field