The renewable energy grant program has become a key piece of any tax package House Democrats would be willing to support after they voted today to reject a deal the White House had made with Republicans on extending expiring tax cuts.

Rep. Chris Van Hollen (D-Md.), a member of the House leadership who took part in the bipartisan negotiations on the tax deal, said Democrats have made significant progress on getting the renewable energy 1603 Treasury Department grant program back into any new package put forward.

"I would say there is a very decent chance we will see 1603 in some form in the bill," Van Hollen said.

Rep. Sander Levin (D-Mich.), chairman of the Ways and Means Committee, said Democrats on the panel will meet either Monday or Tuesday to review the tax package, including the 1603 program and a clean energy manufacturing tax credit program known as 48C. That section had also been left on the cutting room floor during the high-level negotiations, but Levin said it should not be forgotten.

"There are two provisions that are very, very important, and there is no reason for them not to be continued," Levin said. "I think there is strong feeling within our ranks, and I think there is no reason to drop it ... we need to review where we are because, clearly, very much the ball is in the House as much as it is in the Senate."

More than a quarter of House Democrats in a letter today said a two-year extension of the renewable energy grants-in-lieu-of-tax-credit program is vitally important.

The program was an important topic during discussions about the tax package with Vice President Joe Biden yesterday, said Rep. Earl Blumenauer (D-Ore.), who spearheaded sending the 81-signature letter, along with Reps. Mike Thompson (D-Calif.) and Rush Holt (D-N.J.).

"This specific area has been mentioned more than others," Blumenauer said in a press conference. "I think [Biden] understood the intensity of our interest."

"This is the most specific identifiable reason for keeping negotiations open," Holt added. "We have a chance. This is not a case where the deal has been cut and the train has left the station."

Rep Raúl Grijalva (D-Ariz.) said after the caucus vote that Democrats were primarily upset with the tax cuts to the top income earners and the estate tax, but members also would like to see renewable energy tax extensions included in the deal.

"That was one of the tax credits we are insisting be put back in," Grijalva said. "This is a deal that the president cut with Republican congressional leadership. ... There was no inclusion of House leadership -- the Democrats -- and the sense is, we don't feel bound by that deal."

Rep. Nick Rahall (D-W.Va.) said he supported the tax package despite the compromises he feels the president made with Republicans and questioned whether the vote -- made at a caucus meeting of the 112th Congress -- was binding on current House Democrats.

"I'm not sure putting action off was legal," Rahall said. "This was an organization of the 112th caucus as defined by the title of the call notice. The 111th lame-duck members were not invited, so was this legal what we did this morning?"

Senate package and ethanol

It looks very much like the renewable energy grant program and the ethanol blending tax credit extension will be a part of a Senate-negotiated deal expected shortly, senators said this afternoon. The two policies have been a moving piece of Senate Democrats' negotiations on a tax package, as well (Greenwire, Dec. 9).

Democratic Sens. Tom Harkin of Iowa, Kent Conrad of North Dakota, Ben Nelson of Nebraska and Dianne Feinstein of California said they believe that a one-year extension of the ethanol tax credit of 45 cents per gallon was in the package but still have not seen any written confirmation of that.

"One year, anyway. Of course, the wealthy get two years, and we only get one year. What the heck. That's the deal. That's the deal," Harkin said.

Nelson said he had heard both the ethanol and the renewable energy tax grant program had been included in the package Senate Democratic leadership would finalize "in short order," perhaps today or tomorrow. Conrad said he understood it would be "delivered here" within the hour.

It appears including the ethanol provision in the possible House tax package will be a hard negotiation. Grijalva said he hoped that the ethanol tax credit would not be "jammed" into the deal.

But Rep. Collin Peterson (D-Minn.), chairman of the Agriculture Committee, said the ethanol credits were not mentioned, either in support or against, during the caucus vote today. Peterson said he understood that the White House deal did include the ethanol tax credits.

Rep. Leonard Boswell (D-Iowa) said there has been some discussion about the tax extension, and he will work hard to make sure it is included if it is not now.

Clean energy manufacturing tax credits

Lost in the discussions of ethanol and the 1603 program is a clean energy manufacturing tax credit that was also part of a original tax bill presented by Finance Chairman Max Baucus (D-Mont.) last week but was deleted from the White House deal. But Levin and others said they are still fighting to get that tax extension into the package, as well.

Sen. Debbie Stabenow (D-Mich.) said she was working to get it in as hard as she is pushing the 1603 program.

And a spokesman for Blumenauer said the clean energy manufacturing 48C tax credit program was also important. "We're also very supportive of 48C, as well," Derek Schlickeisen said.

Click here to read the House Democrats' letter.

Reporters Phil Taylor, Katie Howell and Sarah Abruzzese contributed.