Will Green Subsidies Be Part of a "Fiscal Cliff" Deal?

In order to avoid the political spotlight, Congress and the President have punted on all sorts of tax and spending issues until after the November elections.  The primary issue to be addressed during the short post-election legislative session is the "fiscal cliff" - an onslaught of automatic tax hikes and spending cuts that will occur on January 1, 2013 - but there are also a lot of other matters that were shelved due to political cowardice expediency.  Among them are several green subsidy programs, including a one-year extension of the wind energy production tax credit and its $12 billion price tag.  Given the many problems with US green energy subsidies, the best move would be to let this boondoggle and its brethren expire at the end of the year, but - fear not! - it ain't gonna be that easy.  In fact, BNA reports that the PTC and other green subsidies could very well end up in the fiscal cliff deal:

Legislation that would extend the wind energy production tax credit and other expiring energy incentives may be included as part of a congressional deal to avert looming tax increases and budget cuts expected by year's end, a Senate Finance Committee staffer said Oct. 17.

Ryan Abraham, a Democratic committee aide, said he is optimistic the tax credit measure (S. 3521) will be incorporated into efforts during the lame-duck congressional session to blunt the effects of the “fiscal cliff” when tax hikes and automatic spending cuts go into effect in January (see related story in this issue)....

More than $18 billion in energy-related tax incentives would be extended under S. 3521, the Family and Business Tax Cut Certainty Act of 2012, approved Aug. 2 by the Senate Finance Committee.

The majority of that spending—$12.1 billion—would fund a one-year extension of the wind energy industry's 2.2 cent per kilowatt-hour production tax credit as well as pay for a change that allows wind projects that are under construction by the end of 2013 to be eligible....

Other energy tax incentives that would be extended in the legislation include a production tax credit for other renewable energy projects, credits for energy-efficient homes and appliances, and tax incentives for cellulosic biofuel and other alternative fuels....

In addition to securing the bill in a deal to avert the fiscal cliff, Abraham said “we'll fight hard” to make sure “something that will be helpful to renewable energy,” such as tax extenders of longer duration, would be included in a longer-term budget deal that could address tax reform.

Granted, Mr. Abraham speaks only for Senate Democrats and was speaking to a room of anxious people dependent on these subsidies, so a bit of skepticism is in order here.  Then again, the Finance Committee approved the Christmas tree that contains all of these green presents with strong bipartisan support (a vote of 19-5), so it's not like there will be strong resistance in the Senate to this bill.  And do we really expect House Republicans - many of whom love green subsidies too - to stand firm when everyone starts FREAKING OUT about the oncoming fiscal cliff?  Oh, and let's not forget that we'll also have to deal with the pork-laden Farm Bill during the post-election legislative session, so it's really anyone's guess as to what gets thrown into a bipartisan deal to avert "fiscal disaster" on January 1.

In short: gird yourselves, folks.  This is going to get really, really ugly, no matter who wins in November.

I need a drink just thinking about it.