Memo to the 111th Congress By a 236-182 vote yesterday, the House passed the Renewable Energy and Energy Conservation Tax Act of 2008, an $18.1 billion package that extends three key renewable energy tax credits that expire at the end of 2008, creates a new tax credit of 50 cents per gallon for producing cellulosic ethanol, and establishes a $4,000 tax credit for plug-in hybrid vehicles. See JCT summary of provisions and scoring. The bill is fully offset, mostly by a provision denying the Section 199 manufacturing deduction to certain oil and gas producers, a change that would raise $13.57 billion. Of course, as we have noted, President Bush has threatened/promised to veto the bill, in large part because it cuts out this sizable tax break for oil and gas companies. Similar legislation died in the Senate last year. Is this an exercise in futility? Not at all. While the outcome of the year's elections cannot be presumed, there is reason to believe that this bill could easily become law in changed political circumstances. This could be true to of a number of other fiscal measures otherwise DOA in '08, such as legislation to:

• codify the economic substance doctrine
• close the carried interest tax loophole
• end offshore deferred compensation
• expand the children's health insurance program
• expand Trade Adjustment Assistance

By the end of the year, Congress, or a chamber thereof, could have passed a raft of fiscal bills ready to roll in the 111th Congress. Presto -- just add President.