Tech Sector Lobbies For House Bailout Bill
The high-tech industry will walk away with a big win if the House passes the Senate's version of the multi-billion dollar financial rescue package: the extension and expansion of a federal research and development tax credit. The tax break, which proponents say is crucial for U.S. innovation, was among a number of so-called tax extenders included by senators to make the measure more palpable. Under the Senate bill, which passed 74-25 Wednesday night, the R&D credit is revived for two years and expanded in 2009 from 12 to 14 percent. The House voted 228-205 to reject an earlier proposal Monday.
A growing coalition of industries and academic institutions, which rely heavily on federal R&D, have been lobbying Congress to make permanent the tax break, which lapsed in December for the 13th time since its initial creation in 1981, or at minimum grant incremental extensions. The Information Technology Industry Association estimates that the credit's expiration has already put at risk more than $14 billion and 10,000 jobs. "America’s most innovative employers are now looking to the country’s leaders for answers," ITAA President Phil Bond said in a statement.
The House and Senate previously approved a two-year renewal but the chambers disagree on how to pick up the tab for the estimated annual $7 billion tax break. Rep. Sander Levin, D-Mich., a senior Ways and Means Committee member, and Rep. Dave Camp, R-Mich., ranking member for the Ways & Means Health Subcommittee, championed the standalone R&D bill, which is supported by much of their committee, including Chairman Charles Rangel. "The fact that it takes a national economic crisis for this Majority to pass R&D, to pass the extenders, should be a wake up call for every job provider in the country," Camp said Thursday.
Information Technology Industry Council President Rhett Dawson wrote to House Speaker Nancy Pelosi and Minority Leader John Boehner Wednesday pressing for passage of the beefed up bailout bill. "With the majority of qualifying R&D credits used to pay U.S. based salaries and wages, not extending these tax credits hits our economy where we can least afford it," he said. The American Electronics Association; political action group TechNet; and an alliance of more than 680 businesses, nongovernmental groups, labor unions, and trade associations also wrote to congressional leaders with a similar message.
Meanwhile, the Bay Area Council, which represents businesses based in the Northern California region, tried to strong-arm several Democrats who broke ranks and joined House Republicans to oppose the earlier rescue bill. "Should a package not be adopted, and soon, there will be a complete freeze in the already tight capital markets," the group said in a letter to California Reps. Pete Stark, Barbara Lee and Lynne Woolsey. "This will have a catastrophic impact on the region’s economy and downsizing and layoffs will be inevitable." Stark said he will continue to oppose the bailout because of lack of protections for consumers and assistance for homeowners.
The Senate-passed package also includes $17 billion in energy incentives, which are seen as vital to alternative energy developers. American Wind Energy Association lobbyist Gregory Wetston warned that failure to pass the legislation would jeopardize billions of dollars in clean energy investment. The Solar Energy Industries Association sent out an alert urging House passage of the package, which has language that would provide eight year extensions of commercial and residential solar energy tax credits.
(Photo Credit: Library of Congress via Flickr)
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