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U.S. Business U.S. on brink of lifting oil export ban as Congress reaches fiscal deal

Oil storage tanks stand in this aerial photograph taken above Cushing, Okla. on Tuesday, March 24, 2015.

Daniel Acker/Bloomberg

Congressional leaders unveiled a broad package of spending and tax legislation that would avert a U.S. government shutdown and lift the 40-year-old ban on crude oil exports.

House Speaker Paul Ryan told fellow Republicans in a closed-door meeting Tuesday night in Washington that leaders had reached a deal pairing a $1.1-trillion spending bill with a separate measure to revive a series of expired tax breaks. The spending bill would fund the government through September 2016.

"Ryan laid out a compelling case to support the deal," which includes lifting the oil export ban, said Representative Reid Ribble of Wisconsin.

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The tax legislation was posted on the House website late Tuesday night, and the spending measure followed it early Wednesday. Senate Democrats were awaiting final language before announcing whether they agree on the plan, a party leadership aide said Tuesday.

Government funding expires at the end of the day Wednesday. The House plans to pass a stopgap spending bill Wednesday that funds the government until Dec. 22 to give Congress time to consider the full-year measure, according to a leadership aide. Ryan, elected speaker in late October, and fellow Republicans want to show they can govern after years of threatened government shutdowns and a 16-day partial shutdown in October 2013.

'Permanent Relief'

The plan "will provide permanent relief to families and job creators" and includes "many provisions that Republicans have long fought for," Ryan spokeswoman AshLee Strong said in a statement.

Republican Representative Ann Wagner of Missouri said the proposal to lift the crude oil export ban "is huge" and would have a "much bigger" effect than building the Keystone XL pipeline.

Ryan told members of his conference during Tuesday's meeting that he was planning for Thursday votes on both bills, according to Representative John Kline of Minnesota. Senate Majority Leader Mitch McConnell, a Kentucky Republican, said earlier Tuesday that he hoped his chamber would also vote on the fiscal plan Thursday.

'Cadillac Tax'

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The posting of the spending measure, however, may complicate Ryan's timetable. He has promised that text of the two bills would be posted for three days before they go to the House floor for a vote. The tax package was filed before midnight Tuesday, meaning that it could be voted on as early as Thursday, but the spending bill was filed after 1 a.m. Wednesday. Strong said in an e-mail that Ryan's office would announce a floor schedule.

The tax measure would extend credits for renewable energy sources that begin construction by the end of 2016, and a $1 per gallon biodiesel credit – provisions sought by Democrats in exchange for lifting the oil export ban.

The legislation would suspend the "Cadillac tax" on high– cost health insurance plans required by the Affordable Care Act. The tax-extension bill would also suspend Obamacare's 2.3 per cent tax on medical devices through 2017.

Tax Credits

The tax-extension measure would make a number of tax breaks permanent, including those for companies' research and development, and allow small business owners to depreciate assets during the first year after purchase rather than over a number of years. Also to be made permanent are an enhanced child tax credit and earned income tax credit, as well as tax breaks for charitable giving and schoolteachers' expenses.

Asked whether she planned to vote for the fiscal legislation, Wagner said, "You bet I am."

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The plan wouldn't provide a "bailout" to financially troubled Puerto Rico, Wagner said. It would provide health funds including bonus payments to doctors and hospitals that use electronic health records. The island's non-voting House member, Pedro Pierluisi, had sought to include a provision in the spending bill to grant Puerto Rico agencies access to Chapter 9 bankruptcy.

House Minority Leader Nancy Pelosi, a California Democrat, said last week that Republicans would need Democratic votes to help pass the plan, as they have in previous spending bills. A House Democratic leadership aide said Tuesday night that Republican leaders ignored her advice by putting the crude oil export language in the spending bill instead of the tax-extender bill. That will cut into Democratic support for the spending bill, the aide said.

No Shutdown

Republicans insist they won't allow another government shutdown like the one in 2013 over an unsuccessful bid by party members to end funding for Obamacare. That shutdown cratered public opinion poll numbers for Republicans, who are particularly wary of a repeat as the 2016 election nears.

"I think we've been pretty clear we're not going to have a shutdown," Ryan, a Wisconsin Republican, said earlier Tuesday during a Politico event in Washington.

The deal would lift the the trade restrictions on U.S. crude oil exports in exchange for extending renewable energy tax credits. U.S. oil producers, including Continental Resources Inc., Pioneer Natural Resources Co. and ConocoPhillips, have been pressing for an end to the restrictions that block exports of most raw, unprocessed crude but don't restrict foreign sales of gasoline, diesel and other refined petroleum products.

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Export Ban

"We have the best technology, the best oil and over time we will drive out Russian oil, we will drive out Saudi, Iranian," Republican Representative Joe Barton of Texas said in an interview. "It puts the United States in the driver's seat of energy policy worldwide. It is a huge victory."

Democratic Senator Jeff Merkley of Oregon called said lifting the export ban was a "huge mistake" that "is a windfall for big oil at the expense of working Americans and our planet."

The spending measure would scale back a program that allows visa-free entry to the U.S. for citizens of about three dozen countries, including much of Europe. People who have traveled recently to Iraq, Syria or other countries deemed to have significant terrorist activity would have to go through the normal visa process.

To seal the agreement, Republicans gave up on their bid to require people to provide a Social Security number to take a child tax credit, said House Ways and Means Committee Chairman Kevin Brady of Texas. Democrats contended such a requirement would disproportionately affect immigrants.

The legislation also would ratify an International Monetary Fund plan approved in 2010 to increase the voting share of emerging economies and double the amount of permanent funding available to the Washington-based fund. Until now, Republican opposition has prevented the IMF from implementing the changes.

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