Congress and the extenders: doing the same thing over and over and expecting different results.

• Author: Lewis, Troy K.

Although attributed to various individuals (Ben Franklin, Mark Twain, Albert Einstein, and Rita Mae Brown, to name a few), the definition of insanity is constant: doing the same thing over and over and expecting different results. As a small child, I was enthralled with the merry-go-round at the local amusement park. The stoic horses and whimsical zoo creatures provided a musical adventure that was always good for a five-minute mystical journey. Despite the loud music, the flashing lights, and the up-and-down movement of my animal of choice, at the end of each ride, I returned to the place of origin having made no real progress. Insanity? Perhaps. But the real design of the merry-go-round is to entertain, not to make progress. In that, the ride was always consistent and true to its design.

Since 1981, Congress has annually put itself on a merry-go-round adventure almost by default. Turning to a move that was originally popularized as a mechanism to secure support for the research and development (R&D) tax credit, Congress often passes tax bills that expire in one or two years. These near-annual expiring tax laws are the so-called extenders. These extenders have grown from just a few items in 1981 to 57 tax benefits that expired at the end of 2013 and six more set to expire at the end of 2014. In fact, the original 1981 R&D tax credit has been extended 15 times nce its initial passage.

The majority of today's extenders were created with the passage of President George W. Bush's tax cuts of 2001 and 2003 (Economic Growth and Tax Relief Reconciliation Act of 2001, P.L. 107-16, and Jobs and Growth Tax Relief Reconciliation Act of 2003, P.L. 108-27, respectively). For the federal budget to balance within approved limits, several of the tax cut provisions could not be made permanent but, rather, were given a finite life so that the provisions would be effective for the decade but the ultimate financial impact of the provisions, if otherwise made permanent, could be kept out of the scoring for the bill.

Many of the extenders have been constructed as short-term by design, such as the bonus depreciation deduction allowing businesses to deduct up to 50% or 100% of the cost of certain new tangible property purchases in certain years. The bonus depreciation provisions were intended to stimulate economic growth and job creation in recessions by providing current-year cash flow incentives for U.S. companies for buying new property, and they were designed...