Ensign offers way to pay for energy tax credits, but it may be too late

By Lisa Mascaro

Tuesday, July 8, 2008 | 4:01 p.m.

WASHINGTON — After single-handedly holding up the nation’s housing relief bill for more than a week, Sen. John Ensign offered a compromise today, saying if Democrats insist that his renewable energy tax credits must be paid for they could make a small across-the-board cut in Washington’s budget to do so.

Ensign says a 0.0005 percent cut in discretionary spending would be all it takes to raise the $8 billion needed to fund his popular bill to extend tax credits for solar, wind and other renewable energy firms.

The offer may come too late.

Senate Majority Leader Harry Reid said Tuesday that as important as the renewable tax credits are “we cannot afford to slow down the housing bill any longer.” Earlier Tuesday he said that in the 10 days since the housing bill was blocked, 85,000 more homes nationwide fell into foreclosure.

Even Republicans are getting antsy over the delay, having just returned from a week at home where they heard from distressed homeowners.

Georgia Republican Sen. Johnny Isakson told CQToday he thought “the time has come” to reassess the block. Florida Sen. Mel Martinez said Ensign’s blockade, “other than delay, it hasn’t accomplished anything.”

Plus, Ensign’s leverage is slipping. Procedurally, he has just a few opportunities left to block the bill this week. Even if he continues to object, the housing bill would come up for a vote Thursday or Friday.

Ensign’s compromise could be a near-final stand in the high-stakes drama that has pitted Nevada’s two senators, who famously pledge to not criticize one another, in a tacit battle in a state that has both the highest foreclosure rates in the nation, but also great interest in renewable energy development.

“We hope they will be willing to take a compromise,” Ensign told reporters.

Ensign explained that if Congress would just trim its “pork barrel earmarks projects you could pay for this whole thing.”

Democrats have insisted that the popular tax extension be paid for, but Republicans, including Ensign, have shot down a proposal to impose a small tax increase on hedge fund managers and overseas companies.

Ensign’s proposal would require a slight cut over 10 years to pay for the 10-year tax credit. The Defense Department would be included, but Veterans’ Affairs would be spared, he said.

“There are a lot of earmark projects that we know have been very embarrassing over the years,” he said. “The bottom line is, if you cut out some of those programs over the next 10 years you could easily pay for this.”

But lawmakers are often reluctant to cut their own projects, which they promote as vital for their states back home. Ensign would have to sway them to do so.

When asked which of his earmarked funds for Nevada he would be willing to cut, Ensign said it would be up to Congress to decide, but added: “I don’t offer wasteful projects.”