Negotiations are ongoing on a tax extenders package though a final agreement is still uncertain. The outcome could range from a large scale package, a one year retroactive patch in which the provisions would expire again at the end of 2015, or failure to reinstate the expired tax provisions at all. Congress is hoping to conclude their work and adjourn by Dec. 11, though it is possible that goal could slip to Dec. 18.

The potential large scale tax extenders agreement would makes some provisions permanent, such as the higher Section 179 expensing limits, and provide a multi-year extension for others provisions, such as the biodiesel tax credit. The Republicans are motivated by the potential to make some of the business tax provisions permanent while Democrats would like to extend or make permanent the Earned Income Tax Credit (EITC), the Child Tax Credit and the American Opportunity Tax Credit that helps working families with education expenses. The education credit and expansions of the EITC and child credit are all scheduled to expire at the end of 2017.

A major issue with the large scale package is that the cost would be $700-$800 billion.  It is likely that the package would not be offset, meaning it would add to the budget deficit. However, permanently extending at least some of the tax provisions would – due to budgetary scoring reasons - make it easier to accomplish comprehensive tax reform in the future.