[Congressional Record Volume 148, Number 4 (Monday, January 28, 2002)]
[Senate]
[Pages S168-S173]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
HOPE FOR CHILDREN ACT--Continued
Mr. ALLARD. Mr. President, my understanding is that we are under
regular business.
The PRESIDING OFFICER. The Senator is correct.
Amendment No. 2722
Mr. ALLARD. Mr. President, I ask unanimous consent to lay aside the
pending amendment and call up amendment No. 2722, which is the Allard-
Hatch-Allen amendment.
The PRESIDING OFFICER. Without objection, it is so ordered.
The clerk will report the amendment.
The legislative clerk read as follows:
The Senator from Colorado [Mr. Allard] for himself, Mr.
Hatch, and Mr. Allen, proposes an amendment numbered 2722 to
the language proposed to be stricken by amendment No. 2698.
Mr. ALLARD. Mr. President, I ask unanimous consent reading of the
amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:
(Purpose: To amend the Internal Revenue Code of 1986 to permanently
extend the research credit and to increase the rates of the alternative
incremental credit)
At the appropriate place, insert the following:
SEC. __. PERMANENT EXTENSION OF RESEARCH
CREDIT; INCREASE IN RATES OF ALTERNATIVE
INCREMENTAL CREDIT.
(a) Permanent Extension of Research Credit.--
(1) In general.--Section 41 of the Internal Revenue Code of
1986 (relating to credit for increasing research activities)
is amended by striking subsection (h).
(2) Conforming amendment.--Paragraph (1) of section 45C(b)
of such Code is amended by striking subparagraph (D).
(3) Effective date.--The amendments made by this subsection
shall apply to amounts paid or incurred after the date of the
enactment of this Act.
(b) Increase in Rates of Alternative Incremental Credit.--
(1) In general.--Subparagraph (A) of section 41(c)(4) of
the Internal Revenue Code of 1986 (relating to election of
alternative incremental credit) is amended--
(A) by striking ``2.65 percent'' and inserting ``3
percent'',
(B) by striking ``3.2 percent'' and inserting ``4
percent'', and
(C) by striking ``3.75 percent'' and inserting ``5
percent''.
(2) Effective date.--The amendments made by this subsection
shall apply to taxable years ending after the date of the
enactment of this Act.
Mr. ALLARD. Mr. President, I ask unanimous consent Senator Warner be
added as a cosponsor to the amendment.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. ALLARD. Mr. President, I am pleased to rise today to offer an
amendment making the research and development tax credit permanent. I
express my gratitude to Senator Hatch, the distinguished ranking member
of the Judiciary Committee. Senator Hatch has been working on this
issue for years, and I am grateful for the opportunity to join him in
this continuing effort on this essential piece of legislation. I also
express my thanks to Senator George Allen who has distinguished himself
as the chairman of the High Tech Task Force.
I am pleased to serve with Senator Allen on the task force, and I
look forward to continuing to work with him as we address the many
numerous technology issues that confront this Nation. Both of our
States take a very active role in high tech. We have many businesses in
both of our States--Virginia and Colorado--that rely on high tech in
order to grow.
As a member of the Senate High Tech Task Force, I have been fortunate
to work with a number of my colleagues on an agenda that is both
probusiness and proconsumer. We have focused on expanding the reach of
Internet and broadband technologies, putting more computers in
classrooms, more schools online dealing with cyber security issues in
general relating to e-commerce, the spectrum, and intellectual property
issues. None of these issues has the power to make as immediate an
impact in the technology industry as a permanent extension of the
research and development tax credit. It is altogether appropriate that
we include this language in any stimulus bill to pass out of the
Senate.
A study by Coopers & Lybrand in 1998 showed that a permanent
extension of the R&D tax credit would create nearly $58 billion in
domestic economic growth through 2010.
This is an astounding and immediate impact that affects virtually
every American. Available solely for incremental research activities in
the United States and Puerto Rico, approximately 75 percent of the R&D
tax credit dollars pay for salaries of employees associated with
research and development. These are high-skilled, high-paying American
jobs.
In an ever expanding global marketplace, it is important that
American companies be able to compete abroad. It is also important that
multinational firms see the United States as a welcome laboratory for
research and development.
Australia, Canada, Germany, Great Britain, and Japan all offer
financial incentives to companies to perform research and development
within their borders which lowers the cost of R&D and gives companies
both a competitive advantage and an incentive to bring their resources
and jobs to the marketplace where they can get the most bang for the
buck. It is my hope that international research and development
investors will recognize that the United States is just such a place.
The R&D tax credit provides an effective incentive for companies to
create valuable, skilled jobs. This is not just theory. The research
and development tax credit was originally enacted in 1981 and has been
extended 11 times.
From 1995 through 1998, the innovation and economic growth in
information technology alone was responsible for one-third of the real
economic growth. Studies by the General Accounting Office, the Bureau
of Labor Statistics, and others have documented the impact the research
and development tax credit has on private research and development
spending. One such study found that every dollar of tax benefit spurs
an additional dollar in private research and development investment.
This is to say nothing of the major economic benefits associated with
increased productivity and efficiency that new technologies and
products bring.
And the benefits don't stop there. Investment in research and
development has generated countless products and technological advances
affecting every facet of American life.
In 1866, American farmers could expect to yield 11.6 bushels of wheat
per acre. Then, about 34 years later, in 1900, the expected yield was
12.2 bushels, climbing to 16.5 bushels per acre in 1950. Today, thanks
to advances in pesticides and crop genetics, that yield can reach well
over 43 bushels per acre.
Medical patients today benefit from a variety of wonder drugs and
medical devices previously unimaginable. The hardware, software, and
fiber that makes the Internet run, even the Internet itself, provide
examples of what aggressive research and development can
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do. The benefits of investment in research and development in short
makes our lives better.
Every American has benefited from the giant leap forward in
technology. Our standard of living is higher. Our quality of life is
greater.
I realize that many of my colleagues may ask why we must make this
tax credit permanent rather than continuing to extend it annually
semiannually. As a former small businessman, I know many of my
colleagues can relate to this. A business must budget, look forward,
and plan in order to get the highest use of their hard-earned dollars.
This principle applies to all businesses, regardless of size, location,
or the number of borders they cross in doing business.
The process of ongoing renewal year to year means the research and
development tax credit offers less value to the businesses and research
initiatives we are seeking to support. Business and technology leaders
look at multiyear projects often over 10 years down the road. When we
look around today and take stock of the many goods and services today
that did not exist 10 years ago, I believe we can agree that this kind
of planning must be encouraged.
I mentioned my experience as a small businessman. As my colleagues
know, I ran my own veterinary hospital. Trained as a scientist, I
continue to keep up on the latest developments in pharmaceuticals,
treatment techniques, and chemistry. I would like to make one thing
very clear today: That is, scientific development does not fit in
calendar or fiscal years. It is not cyclical or situational. Science is
an evolving, growing, expanding study. This vital process through which
virtually all human endeavor can be traced is one that should not be
inhibited by regular policy debates when the result is so clear.
Research and development is the cornerstone of healthy industry and
provides solutions to problems we may not even realize exist.
Uncertainty can equate to less investment and undermines the entire
purpose of the research and development tax credit.
President Bush included permanent extension of the R&D tax credit in
his initial tax relief plan. I was pleased to see that a majority of my
colleagues supported this credit by voting 62 to 38 on the final tax
package, which at that time included the permanent extension. It is my
hope that we will be able to continue the momentum of last year's vote
and seize this opportunity to state, in no uncertain terms, that the
Senate recognizes the importance of this tax credit, the innovations it
inspires, and the tangible impact it makes on the quality of life in
America.
A number of prominent trade organizations have organized the R&D
credit coalition in an effort to support the Congress in passing this
legislation. I ask unanimous consent to print a list of these
organizations in the Record.
There being no objection, the list was ordered to be printed in the
Record, as follows:
Association Members of R&D Credit Coalition
(Listing from NAM/R&D Workbook)
AeA (formerly American Electronics Association)
Aerospace Industries Association (AIA)
American Association of Engineering Societies
American Council on Education
American Institute of Aeronautics and Astronautics
American Institute of Chemical Engineers
American Society of Civil Engineers
American Society of Engineering Education Engineering Deans
Council
Automotive Parts Rebuilders Association
Biotechnology Industry Organization
Business Software Alliance
Computing Technology Industry Association
Electronic Industries Alliance
Federation of Materials Societies
Information Technology Association of America
Information Technology Industry Council
IPC, Association Connecting Electronics Industries
Medical Device Manufacturers Association
National Association of Manufacturers
National Electric Manufacturers Association
National Society of Professional Engineers
North American Die Casting Association
Pharmaceutical Research and Manufacturers of America
Semiconductor Equipment and Materials International (SEMI)
Semiconductor Industry Association
Software & Information Industry Association (SIIA)
Software Finance and Tax Executives Council
Steel Manufacturers Association
Technology Network
Telecommunications Industry Association
The Advanced Medical Technology Association (AdvaMed)
The Tax Council
U.S. Chamber of Commerce
Mr. ALLARD. I also ask unanimous consent to print a number of
letters, from the American Electronics Association, the Information
Technology Industry Council, and the R&D Credit Coalition, regarding
the importance of including this permanent R&D tax credit extension in
the current stimulus bill.
There being no objection, the material was ordered to be printed in
the Record, as follows:
American Electronics Association,
Washington, DC, January 28, 2002.
Dear Senator: On behalf of the high-tech industry, I write
to express AeA's strong support for the Allard/Hatch/Allen
amendment which calls for a permanent extension of the
research and development tax credit (R&D tax credit) along
with a modest increase in the Alternative Incremental
Research Credit (AIRC) rates. We believe that this amendment
would provide businesses the certainty to invest in
additional R&D and would stimulate the economy. Our industry
is unified in its support of such a measure.
Please vote in support of the Allard/Hatch/Allen amendment
(SA 2772.) This amendment is identical to bipartisan
legislation, S. 41, sponsored by Senators Max Baucus and
Orrin Hatch and which currently has 53 Senate cosponsors.
The many economic benefits of the R&D tax credit are well
documented. A permanent R&D credit would: Create additional
high-paying, high-skilled jobs in the United States; increase
productivity in the U.S. almost immediately; stimulate
additional R&D spending in the United States, ranging from 1
to 2 additional dollars for every dollar of foregone tax
revenue; and lower U.S. production costs and consumer prices.
In times of uncertainty, companies are reluctant to invest
in long term projects, and therefore anything that provides
certainty will make it that much easier to commit resources
now to hire people to pursue long term research projects. The
current economic slowdown requires this kind of dramatic,
effective action by the Congress.
AeA (American Electronics Association) is the nation's
largest high-tech trade association and is comprised of more
than 3,500 small, medium and large high-tech companies.
Passage of an economic stimulus package is very important to
the high-tech industry right now, and we hope the U.S. Senate
will act quickly to approve a stimulus package that includes
a permanent R&D tax credit extension.
Sincerely,
William T. Archey,
President and CEO.
____
Information Technology
Industry Council,
Washington, DC, January 28, 2002.
Hon. Orrin G. Hatch,
Hon. Wayne Allard,
U.S. Senate, Washington, DC.
Dear Gentlemen: The Information Technology Industry Council
(ITI) wishes to express our strong support for your amendment
to permanently extend the Research and Development (R&D)
credit and to increase the rates of the alternative
incremental credit. We commend you for your leadership on
such a critical issue to the U.S. economy.
As the representative of the leading U.S. providers of
information technology (IT) products and services. ITI is
extremely proud of the critical role our member companies
have played in fueling the extraordinary growth in
productivity and job creation over the last decade. Much of
that growth was fueled by industry-funded investments in R&D.
As you know, R&D is the lifeblood of the IT industry. It
has proven instrumental in helping America remain at the
forefront of technological development and innovation. While
we appreciate the fact that the credit has been extended many
times over the years, a permanent R&D tax credit will provide
a more predictable environment for sustaining our lead in
cutting-edge technology.
The R&D credit has long enjoyed bipartisan support in both
houses of Congress. We hope the Senate will once again
demonstrate its commitment to U.S. technology by voting in
favor of your amendment.
Sincerely,
Rhett Dawson,
President.
____
R&D Credit Coalition,
Washington, DC, January 28, 2002.
Hon. Wayne Allard,
U.S. Senate,
Dear Senator Allard: On behalf of the members of the R&D
Credit Coalition, we thank you for offering as an amendment
to the pending economic stimulus bill (S. 622) a permanent
extension of the research and experimentation tax credit (the
``R&D credit'') with a modest increase in the Alternative
Incremental Research Credit (AIRC) rates.
Private-sector research is vital to our national security
as well as to our economic resilience. In order to maximize
the potential for new and continued U.S.-based research, it
is important that companies be able to rely on the long-term
availability of the R&D
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credit. This is especially true in periods of economic
uncertainty, when it is particularly difficult for companies
to commit to high cost, high-risk projects.
The R&D tax credit encourages companies to create more
high-skilled, high-paying jobs, as well as increased economic
security and higher standards of living for American workers.
In addition, this credit enables companies to provide
increased jobs and salaries for engineers, researchers and
technicians. Just as important, however, are the additional
jobs created in manufacturing, administration and sales when
research yields new products taken to market.
By making the commitment to U.S. based research permanent,
Congress is in the unique position to help stimulate
investments now in more long-term research projects in the
U.S.-providing both an immediate boost to the economy and a
stronger foundation for future economic growth through
productivity gains. We look forward to working with you to
see a permanent extension of the R&D credit with a modest
increase in the AIRC rates enacted into law this year.
Sincerely,
Bill Sample, Microsoft Corporation, Chairman, R&D Credit
Coalition; Donna Siss Gleason, The Boeing Company, Vice
Chair, R&D Credit Coalition; Kristin Paulson, United
Technologies Corporation, Cochair, R&D Credit
Coalition, Government Affairs Committee; Karen Myers,
EDS, Cochair, R&D Credit Coalition, Government Affairs
Committee; Caroline Graves Hurley, American Electronics
Association, Executive Secretary, R&D Credit Coalition.
Mr. ALLARD. Mr. President, at one time or another, we have had
various Members from the Senate state how important it is to encourage
research and development in our country. In fact, the majority leader
himself, Tom Daschle, on January 4, 2001, said:
We should act to make the research and development tax
credit permanent; the sooner the better.
And then majority leader Tom Daschle, on January 4, 2001, stated:
. . . the R&D tax credit is one of the most effective
mechanisms to encourage innovation, increase business
investment, and keep the economy growing.
Now, as I mentioned in my remarks, being a scientist and having been
in business for myself, I fully understand the importance of research
and bringing those technologies to the marketplace. Not only do the
consumers benefit, but society in general and the whole world benefit.
If we are going to continue to be a leading competitive nation in the
world, we need to continue research and development.
As members of the chamber of commerce in the town in which I
practiced veterinary medicine, we tried to attract businesses that did
a sizable amount of research and development because we understood
that, with research and development, that company was likely to be with
us for a long time because they were continually keeping up with
advancements in science and bringing that to the marketplace.
So as we talk about what it is with which we can stimulate the
economy in America, I think one of the most significant things we can
do as a Congress is to send to the President a research and development
tax credit that is permanent, not one that will change every year.
I can understand the frustrations of business people who come to me
and have talked in town meetings and said: Look, if we only had some
idea of how long this research and development tax credit would last
instead of periodically renewing it, we could lay out long-term plans
for R&D. I agree. I think it is important to have a very successful
program of research and development in your company. You have to have a
long-range plan in place, and the only way to do that is to have some
assurance from the Congress, the President, and the Federal Government
that the tax credits are going to be there to use in putting together
any research needs you may have in order to meet product development
within your company. So this is an extremely important piece of
legislation. I think it is an important issue.
The Senate should address it, and the sooner the better, during these
times when our economy is not doing so well. Even if our economy was
doing well, this is what we need to have in place in order to sustain
economic growth. It would be less likely we would get into economic
downturns with this kind of encouraging tax credit on a permanent
basis. I encourage my colleagues to join me in voting for the permanent
extension of the research and development tax credit.
I yield the floor.
The PRESIDING OFFICER. The Senator from Utah is recognized.
Mr. HATCH. Mr. President, I thank my colleague. I commend him for
being willing to file this amendment today. I rise to speak in support
of the amendment of the distinguished Senator from Colorado to extend
permanently the research credit.
This amendment we offer today is simple and straightforward. It would
extend permanently the credit for increasing research activities,
commonly known as the research credit or the R&D credit. This provision
was an important contributor to our robust economic growth of the last
half of the 1990s.
Let me explain why this amendment is necessary.
In July 1999, the Senate voted to make the research credit permanent.
Unfortunately, the House version of the 1999 tax bill included only a
5-year extension of the credit. The 5-year extension did prevail in the
conference. Unfortunately, that bill was vetoed by President Clinton
for reasons unrelated to the research credit itself.
However, in November of 1999, Congress passed and President Clinton
signed the Ticket to Work and Work Incentives Improvement Act, which
included a 5-year extension of the research credit. Therefore, the
credit was extended to June 30, 2004.
In mid-2000, the Senate again had the opportunity to vote on a
permanent extension of the research credit. While we were debating that
year's version of the death tax repeal bill, Senator Baucus and I
offered an amendment to make the research credit permanent. The Senate
passed the amendment with a vote of 98 to 1. Once again, President
Clinton vetoed the underlying bill.
Again last May, as we debated the 2001 tax cut bill, I offered an
amendment to extend permanently the research credit. That amendment was
withdrawn, but the provision was included in a managers' amendment that
was approved by the Senate. Unfortunately again, however, the permanent
research credit was dropped in conference and the credit was not
extended.
Thus, as it stands under present law, the research credit is
scheduled to expire on June 30, 2004. This is most unfortunate, Mr.
President, because in 2004 the Congress and, more importantly,
America's business community will once again have to go through the
complete rigmarole of on-again, off-again uncertainty of an important
tax provision. Temporary extensions are poor tax policy. The ultimate
loser in this game is not the Congress or even the companies that
engage in research, but each American. That is because every one of us
is the direct beneficiary of the research investments made by the
businesses of America. We benefit from the higher economic growth and
increased productivity and the higher degree of global competitiveness
that increased research brings.
The research credit has been in the Internal Revenue Code for more
than 20 years in one form or another. It has expired and been extended
10 times, Mr. President. Those extensions have been as short as 6
months and as long as 5 years. There have even been periods when the
credit was allowed to expire and then retroactively reestablish. On one
occasion, the credit expired and was reenacted prospectively, leaving a
gap period where the credit was not available. The one thing the credit
has never been is permanent. That is a shame.
This is significant because, as effective as the credit has been in
providing a strong incentive to companies to increase research
activities, it has been inherently limited in its effectiveness because
business leaders have never been able to count on the credit being
there on a long-term basis, and therefore their long-term planning
can't be entered into.
Anyone who has been in business more than 10 minutes knows that
planning and budgeting--unlike what we do in Congress--is a multiyear
process. Anyone who has been involved in research knows that scientific
enterprise does not fit neatly into calendar or fiscal years.
Our history of dealing with the research credit--that is, allowing it
to run to the brink of expiration and bringing it back after it is dead
with
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retroactive extensions--results in not only very poor tax policy but is
also very detrimental--and I would say highly so--to our research-
intensive business entities and indeed the whole country.
It is time to get serious about our commitment to a tax credit that
is widely viewed by economists and business leaders as a very effective
provision in creating economic growth and keeping this country on the
leading edge of high technology in the world. A 1998 study by Coopers
and Lybrand dramatically illustrated the significant economic benefits
provided by the research credit. According to the study, making the
credit permanent would stimulate substantial amounts of additional R&D
in the United States, increase national productivity and economic
growth almost immediately, and provide U.S. workers with higher wages.
The vast majority of the Members of this body are on record in
support of the permanent research credit. As I mentioned, only 18
months ago, 98 Senators voted in favor of permanence.
But, while practically everyone says they support a permanent
research credit, it has become too easy for Congress to fall into its
two-decade-long practice of merely extending the credit for a year or
two, or even five years, and then not worrying about it until it is
time to extend it again.
These short-term extensions have occurred ten times since 1981. Ten
short-term extensions for a tax credit that most Members of this body
strongly support. I am not sure we realize how the lack of permanence
of the credit damages its effectiveness.
Research and development projects cannot be turned on and off like a
light switch. They typically take a number of years and may even last
longer than a decade. As our business leaders plan these projects, they
need to look years ahead in making the projections and estimating the
potential return on their investment. Because the research credit is
not permanent, and its extension is not assured, the availability of
the credit over the life of these projects is uncertain and is thus
often not included in the numbers. As a result, the projected return on
the investment is lower and some promising research projects are simply
not funded.
With a permanent credit, these business planners would take the
benefits of the credit into account, knowing they would be there for
all years in which the reason is to be performed. The result would be a
lower projected cost, leading to more research projects being funded,
which in turn would lead to more benefits to the economy, to our
productivity, and to each consumer. In fact, making the credit
permanent would start these benefits now and actually give an immediate
boost to the amount of research performed, even before the current
credit expires in 2004.
There is little doubt that a significant amount of the incentive
effect of the research credit has been lost over the past 20 years
because of the constant uncertainty about its continuing availability.
This uncertainty has undermined the very purpose of the credit. For the
government and the American people to maximize the return on their
investment in U.S.-based research and development, this credit must be
made permanent. And now is the time to do so.
I believe a permanent research credit is one of the most important
elements of our tax code because it is so tied in with the issues of
economic growth and our future prosperity.
According to Chairman Greenspan, the Nation's high productivity
growth, which played an instrumental role in our economic growth during
the second half of the 1990s, would likely not have been possible
without the innovations of recent decades, especially those in
information technologies. The research credit is a key factor in
keeping these innovations coming. But a temporary credit is inherently
limited in its ability to do this.
As I mentioned earlier, I am afraid to many of us are stuck in a
mindset that says that since the research credit can just be taken care
of later this year in a tax extenders package, or when it gets closer
to its 2004 expiration date, why bother about it now?
I want to emphasize that another temporary extension is not the issue
here. We can and probably will always extend the credit when the time
for its expiration comes. It will likely be on the less effective basis
we have always done it, perhaps only for a few months, or it may be on
a retroactive basis, and there may be a gap created, but we will
probably keep extending it. The issue is whether or not we should
magnify the power of this credit by making it permanent.
This amendment is about long-term growth; it is about fostering
innovation and keeping the innovation pipeline filled; and it is about
sustaining the productivity gains that have brought us where we are
today and that can help us stay prosperous in the future as we deal
with the entitlement challenges ahead.
In conclusion, if we decide not to make the research credit
permanent, are we not limiting the potential growth of our economy? How
can we expect the American economy to hold the lead in the global
economic race if we allow other countries, some of which provide huge
government direct subsidies, to offer stronger incentives than we do?
Making the credit permanent will keep American business ahead of the
pack. It will speed economic growth. Innovations resulting from
American research and development will continue to improve the standard
of living for every person in the U.S. and worldwide.
I have been making this case year after year, and I am so pleased to
have the leadership of our distinguished Senator from Colorado in
helping us to pass it on the economic stimulus bill. I do believe that
almost everybody in the Senate should vote for this amendment. This
makes sense. It creates jobs and gives businesses an opportunity to
plan ahead. It literally keeps us at the cutting edge of technology and
helps us to really be what we should be, in a time such as this when we
want to stimulate the economy. I don't know of many amendments that
would do as much as this particular amendment of the Senator from
Colorado and myself. I praise him and thank him for his dedication in
bringing this issue forward.
I urge my colleagues to support this amendment.
Mr. President, I yield the floor and suggest the absence of a quorum.
I withhold.
The PRESIDING OFFICER. The Senator from Colorado.
Mr. ALLARD. I thank the Senator from Utah for all his compliments.
This is a subject I know he has worked on for years. I appreciate what
he is trying to do.
I could not agree more with his statement that one of the most
important things we can do to get the economy to grow is to make on a
permanent basis the research and development tax credit.
I am also involved in the Senate Republican High Tech Task Force. I
would like to make a part of the Record their policy agenda for the
107th Congress where they talk about a Tax Code for the 21st century
and list a number of actions they believe we can take to encourage the
high-tech industry to grow in America. They mention, among those,
making the research and development tax credit permanent, in addition
to a number of other provisions. I ask unanimous consent that be
printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
Senate Republican High Tech Task Force Policy Agenda for the 107th
Congress
Protecting Internet Privacy and E-Commerce.--The Task Force
believes market-based solutions are the best way to balance
legitimate privacy concerns with the need for flexible e-
commerce. While certain types of medical and financial data
may warrant special legislative protections, we are skeptical
that the Congress should rush to delegate to government
bureaucrats the task of developing effective mandates related
to personal privacy. If legislation is considered, we believe
that it should not discriminate against Internet
transactions, should provide a uniform federal standard for
enforcement of privacy policies, and should limit the ability
to regulatory agencies to impose burdensome and cumbersome
mandates.
Promoting Education and Technology.--Without a workforce
fully capable in math, science, and computing skills, our
competitiveness is at risk. Without a consumer base able to
utilize the latest technological advances, our economic
growth may wane. The Task Force believes that a top priority
in education should be development of policies both
encouraging the use of technology in the classroom and using
this technology to
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master basic math, science, and computer skills.
Safeguarding Copyright in the Digital Age.--With our
economy dependent on cutting-edge software and our families
enjoying music, movies, and television through new
distribution models, protecting copyrighted material is of
paramount importance. The Task Force believes that the
Congress should bolster efforts to protect copyrighted
materials from piracy and to facilitate legal digital
distribution of copyrighted works.
Deploying Broadband Technologies.--The Task Force
understands that high speed Internet access has the power to
transform how we use the Internet. Encouraging tax and
regulatory policies that foster rapid, efficient, and
competitive deployment of broadband and other important
technologies to urban and rural areas will be crucial to
ensure our economic growth and technological competitiveness.
Enhancing Free Trade.--The Task Force believes that trading
freely with other countries has allowed our producers of
technology goods and services to lead the world in technology
innovation while significantly raising our standard of
living. We believe that a vital component of free trade is
ensuring enforcement of international trade agreements to
guarantee that our businesses are not placed at a competitive
disadvantage and that our intellectual property is not
pirated or copied illegally.
Protecting Internet Security and Combating
Cyberterrorism.--The Task Force supports legislation and
appropriations to protect the privacy of Internet users and
to aid law enforcement in making sure the Internet does not
become a haven for cybercriminals. Our goals include
enhancing deterrents to Internet piracy and counterfeiting of
intellectual property and bolstering international
cooperation against computer crimes. Also, our communications
infrastructures remain vulnerable to cyberattacks, and we
must support executive branch efforts to bolster cooperation
within and between Federal agencies and the private sector.
Digital Decency.--The Task Force believes that the growth
of the Internet does not have to mean a decline in cultural
decency. Advocating ``Digital Decency'' means using the bully
pulpit to advocate responsible entertainment products,
encouraging parents and children to turn their backs on
music, movies, and games advocating violence and
discrimination, and encouraging better private sector filters
to keep the Internet experience a healthy one.
Patent and Trademark Office Funding.--The Task Force
believes that the explosion of technology patents has made it
more necessary than ever to ensure that the PTO has adequate
funding through its own fee mechanisms, rather than siphoning
off these fees for general government use.
A Tax Code for the 21st Century.--The Task Force believes
our tax code must be reviewed and modernized to reflect
current business realities affecting technology industries.
Issues which the Task Force believes should be considered
include making the research and development tax credit
permanent, accelerating the depreciation schedules for
technology equipment and encouraging capital formation for
small technology businesses.
Keeping Government Out of Competition With E-Commerce
Businesses.--The Task Force believes that federal government
agencies should not use taxpayer dollars to compete with
private businesses developing new e-commerce products and
services.
Mr. ALLARD. Mr. President, I ask unanimous consent that a news
release from the Senate Republican High Tech Task Force dated Friday,
June 29, 2001, be printed in the Record. It talks about, again, Senator
Smith's effort in getting it attached to the Patients' Bill of Rights
and reemphasizes the point we are trying to make today on how important
it is we provide a permanent extension of the research and development
tax credit.
There being no objection, the material was ordered to be printed in
the Record, as follows:
High Tech Task Force Supports Smith-Hatch-Allen Amendment to Patients
Bill To Make R&D Tax Credit Permanent
Washington, DC.--Senate Republican High Tech Task Force
Chairman Senator George Allen (VA) today pledged the
endorsement of the group of an amendment by Senators Gordon
Smith (OR), Orrin Hatch (UT) and Senator Allen to make the
federal Research and Development (R&D) Tax Credit permanent.
The Smith-Hatch-Allen amendment to the Patients' Bill of
Rights, currently being debated on the Senate floor, makes
the R&D tax credit permanent and increases the rates of the
alternative incremental research and development tax credit
as provided in S. 41, Senator Hatch's bill. Both Senators
Smith and Hatch are also High Tech Task Force members.
Chairman Allen said making the R&D tax credit permanent
will help improve the quality of medical care for all
Americans.
``Providing every possible incentive for technological
advancements and innovations will lead to better and less
expensive medical treatments and devices,'' Chairman Allen
said. ``The R&D tax credit is crucial not only to the field
of medicine, but to the technology community at large.
``A permanent R&D Tax Credit credibly encourages investment
in basic research that over the long term can lead to the
development of new, more cost-effective, and more efficient
technology products and services. Research and development is
also essential for our long-term, competitive economic
growth,''
Chairman Allen also pointed to a study conducted by Coopers
& Lybrand, which shows that workers in every State will
benefit from higher wages if the R&D credit is made
permanent. Payroll increases as a result of gains in
productivity stemming from the credit are estimated to exceed
$60 billion over the next 12 years.
The R&D tax credit was original enacted in 1981 and has
been temporarily extended ten times. Permanent extension of
the Research and Development Tax Credit is a component of the
Task Force's policy agenda, which was announced March 1,
2001.
Mr. ALLARD. Mr. President, I also ask unanimous consent that another
press release from the Senate Republican High Tech Task Force for
Friday June 29, 2001, be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
High Tech Task Force Members Urge Finance Committee To Make R&D Tax
Credit Permanent
Washington, DC.--Members of the Senate Republican High Tech
Task Force including Chairman Senator George Allen (VA) are
urging the Senate Finance Committee to include permanent
extension of the Research and Development (R&D) Tax Credit in
the tax relief package that they will soon consider.
Members of the Task Force, Senators Allen, Wayne Allard
(CO), Robert Bennett (UT), Sam Brownback (KS), Conrad Burns
(MT), Orrin Hatch (UT), Jeff Sessions (AL), Gordon Smith (OR)
and John Warner (VA), as well as Senators Mike Crapo (ID),
Bill Frist (TN), Tim Hutchinson (AR), and Republican Policy
Committee Chairman Larry Craig (ID) today sent letters to
Senate Finance Committee Chairman Charles Grassley (R-IA) and
Ranking Member Max Baucus (D-MT) with their request.
``We believe the R&D tax credit is essential to the
technology community,'' the Senators wrote. ``It encourages
investment in basic research that over the long term can lead
to the development of new, more cost-effective, and more
efficient technology products and services. Research and
development is essential for long-term economic growth.''
The R&D tax credit was originally enacted in 1981 and has
been temporarily extended ten times. ``Permanent extension is
long overdue,'' the Senators maintained. ``Yet because it has
never been made permanent, this vital tax credit offers
business less value than it should because of its
unpredictability.''
The Senators also noted that President Bush included the
permanent extension in his budget, and they urged Finance
Committee members include this measure in the tax relief
package as ``making the R&D tax credit permanent is essential
to helping maintain America's technology lead in the world.''
Permanent extension of the Research and Development Tax
Credit is a component of the Task Force's policy agenda,
which was announced March 1, 2001.
May 7, 2001.
Hon. Charles Grassley,
Chairman, Committee on Finance, Washington, DC.
Dear Chairman Grassley: We respectfully request that you
include permanent extension of the research and
experimentation (R&D) tax credit in the tax relief package
you will consider in your Committee shortly.
As Republican Senators and members of High Tech Task Force
(HTTF), we believe the R&D tax credit is essential to the
technology community. It encourages investment in basic
research that over the long term can lead to the development
of new, cheaper, and better technology products and services.
Research and development is essential for long-term economic
growth. Innovations in science and technology fueled the
massive economic expansion we witnessed over the course of
the 20th century. These advancements have improved the
standard of living for nearly every American. Simply put, the
research tax credit is an investment in economic growth, new
jobs, and important new products and processes.
As you know, the credit was originally enacted in 1981, and
has been temporarily extended ten times. Permanent extension
is long overdue. There is broad support among Republicans for
the credit, and President Bush included the credit in the
$1.6 trillion tax relief plan. Yet because it has never been
made permanent, this vital tax credit offers business less
value then it should. Business, unlike Congress, must plan
and budget in a multi-year process. Scientific enterprise
does not fit neatly into calendar or fiscal years. Research
and development projects typically take a number of years,
and may even last longer than a decade. As our business
leaders plan these projects, they need to know whether or not
they can count on this tax credit. The current uncertainty
surrounding the credit has induced businesses to allocate
significantly less to research than they otherwise would if
they knew the
[[Page S173]]
tax credit would be available in future years. This
uncertainty undermines the entire purpose of the credit.
We believe making the R&D tax credit permanent is essential
to helping maintain America's technology lead in the world.
We thank you for your consideration.
Sincerely,
George Allen, Larry E. Craig, Conrad Burns, Tim
Hutchinson, Gordon Smith, Wayne Allard, Jeff Sessions,
Orrin Hatch, Michael Crapo, Robert F. Bennett, Sam
Brownback, Bill Frist, John Warner.
Mr. ALLARD. Mr. President, I ask unanimous consent that a news
release dated Tuesday, May 8, 2001, entitled ``High Tech Task Force
Members Urge Finance Committee to Make R&D Tax Credit Permanent,''
which documents the work of this task force and the importance they
place in making permanent the research and development tax credit, be
printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
Republicans Will Keep Fighting To Make R&D Credit Permanent--High Tech
Task Force Chairman Allen Praises Senator Gordon Smith's Leadership
Washington, DC.--Senate Republican High Tech Task Force
Chairman Sen. George Allen (VA) today vowed to keep pushing
for an amendment to make the Research and Development (R&D)
Tax Credit permanent, despite almost universal Democrat
opposition to the provision in a Senate vote. He also praised
the leadership of Sen. Gordon Smith (OR) in sponsoring the
amendment, which was also sponsored by Sen. Orrin Hatch (UT)
and Sen. Allen.
Senate Democrats, led by Finance Committee Chairman Max
Baucus (MT), defeated the provision 57-41. Only one Democrat
joined 40 Senate Republicans in supporting the Smith-Hatch-
Allen amendment. Cosponsors of the amendment were Senators
Wayne Allard (CO), Robert Bennett (UT), Sam Brownback (KS),
Conrad Burns (MT), Larry Craig (ID), Mike Crapo (ID), John
Ensign (NV), and Kay Bailey Hutchison (TX).
``Senator Gordon Smith deserves commendation for his
leadership for the idea of a permanent R&D Tax Credit,''
Chairman Allen said. ``Unfortunately, Democrats voted almost
universally to pull the plug on one of the top items on the
technology community's agenda.
``I pledge the support of the High Tech Task Force in
working with Senators Smith and Hatch to find any avenue to
make the R&D Tax Credit a permanent part of our tax code.
``A permanent R&D Tax Credit brings certainty and will spur
more American investment and more American jobs that can lead
to the development of new, more cost-effective, and more
efficient technology products and medicines Research and
development are also essential for America's long-term,
competitive economic growth.''
Studies have shown that a permanent R&D tax credit would
lead to higher wages for workers and gains in productivity.
The R&D tax credit was originally enacted in 1981 and has
been temporarily extended ten times. Permanent extension of
the Research and Development Tax Credit is a component of the
Task Force's policy agenda, which was announced March 1,
2001.
Mr. ALLARD. Mr. President, I do not see anybody seeking recognition,
so I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. REID. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
____________________