Meanwhile, lobbyists charge corporations immense fees to work on getting tax extenders passed. A report based on data from the Center for Responsive Politics finds that over 1,300 lobbyists — one out of every ten registered by the federal government — have reported lobbying on the tax extenders bill, spending $2.9 billion in the process.

Politicians position themselves as the “champion” of a certain tax break to extract campaign contributions from interested parties. In addition, it’s easier politically to pass a short-term bill that increases the deficit slightly than to make them permanent, with a much larger price tag (close to $1 trillion over a ten-year time frame).

Lawmakers make a big show of lamenting the process of drafting and passing legislation for the same tax breaks every year or two. “This will be the last tax extenders bill the committee takes up as long as I’m chairman,” said Sen. Ron Wyden (D-Ore.) in the Finance Committee yesterday. However, while inefficient, the perpetual uncertainty around tax extenders serves the purposes of both lawmakers and lobbyists.

These tax breaks, over fifty in all, are habitually given one- or two-year temporary extensions, but never made permanent. For example, the tax credit for research and development, one of the largest ones in the bill, has been extended fifteen times since first introduced in 1981. The most recent tax extenders bill expired at the end of 2013; this new bill retroactively extends the provisions through 2015, at a cost of around $86 billion . Unlike oft-heard demands to offset the cost of unemployment benefits or other government spending, the Senate Finance Committee did not compensate the budget for this $86 billion, instead choosing to increase federal spending in a way most comfortable to politicians and their backers, through the tax code.

While Congressional watchers dissected yet another hypothetical budget from Republican Rep. Paul Ryan (Wisc.), legislation with major tax implications passed the Senate Finance Committee Thursday, putting it on a virtually guaranteed path to becoming law. The perennial “tax extenders” bill, consisting mostly of corporate tax breaks, always captures the interest of corporations and their lobbyists, if not the public.

Corporate loopholes

Some of the tax extender provisions are small but puzzling, like the benefit for Puerto Rican rum producers or a depreciation tax credit for thoroughbred racehorses. Some encourage business investment in worthwhile projects, like the production tax credit for wind energy. And a few tax extenders really help individuals. There’s a credit to help businesses provide funding for mass transit to their workers up to $250 a month tax-free, a deduction for teachers who pay for school supplies out of their own pockets, and an exclusion for mortgage holders from having to pay taxes on principal forgiveness or other debt relief.

However, the lion’s share of the tax breaks — roughly 90 percent, according to Americans for Tax Fairness — affect the corporate bottom line. Four tax breaks supply almost all of the cost of the bill, and one of the largest, the Active Financing Exception (AFE), provides an example of the true nature of tax extenders.

This provision allows financial institutions to defer taxes on income they can claim to have earned outside the United States. The firms use accounting tricks to make it appear like dividends, interest and other sources of financial income were generated in offshore tax havens. Companies like Caterpillar have shifted their earnings overseas in a similar manner, but the AFE opens a loophole for income derived from financial transactions. The two-year extension of the AFE will cost the government $10.4 billion, but since it has been repeatedly extended since 1997, the real cost is much higher.

A substantial portion of the lobbying on the tax extenders bill focuses on the AFE, led by the financial arm of General Electric, GE Capital. They dispatched 48 lobbyists and spent millions to argue for maintaining a loophole that has allowed them to receive $3.1 billion in tax refunds from 2008-2012, according to Citizens for Tax Justice. The return on investment equals around $24 for every $1 spent lobbying.

Almost all of GE’s lobbyists previously worked in Congress or the executive branch, and had the connections necessary to influence policymakers. For example, former Senators John Breaux (D-LA) and Trent Lott (R-MS) both represented GE on the issue. GE Capital is one of a number of commercial bank and securities firms to lobby for extending the AFE.

Provisions like the AFE help to explain why so many U.S. corporations pay no corporate taxes. Despite the high nominal corporate tax rate in America, the actual rate corporations pay is among the lowest in the industrialized world.

The Senate Finance Committee debate on tax extenders was typical of the process. Chairman Wyden and ranking member Orrin Hatch (R-Utah) initially proposed a scaled-back version of the package, costing around $67 billion. But during the markup on Thursday, provisions stripped from the bill were re-inserted, ballooning the final cost, and making the finished product virtually identical to tax extender bills in the past. The House Ways and Means Committee is working on their own version of the bill, and the leadership has made similar assurances about paring back the most egregious portions. But like cherry blossoms returning to Washington in the spring, the loopholes always seem to return to the bill before long.

Wyden insists that he will not pass another tax extenders bill; he called this one the EXPIRE Act, to reinforce the fact that they have an end date. He wants to use the deadline to force through comprehensive tax reform next year. But the differences between the parties on taxes are fairly wide, making it easier to just wave through the same loopholes year after year. That means more lucrative business for lobbyists, more campaign donations for politicians, and more tax breaks for the largest corporations in America.