[Congressional Record (Bound Edition), Volume 148 (2002), Part 1]
[Senate]
[Pages 687-688]
[From the U.S. Government Publishing Office, www.gpo.gov]




          EXTENSION OF THE RESEARCH AND DEVELOPMENT TAX CREDIT

  Mr. ALLARD. Mr. President, I am here this morning to express my 
disappointment that I am not going to have an opportunity to call for 
the yeas and nays on the permanent extension of the research and 
development tax credit. It has to be one of the most important 
provisions and amendments that will be made to the stimulus package.
  I again am disappointed that stimulus package is not going to move 
forward out of the Senate. Many of us

[[Page 688]]

have worked hard. We think it is time for us to have a stimulus 
package. The economy needs to have that happen.
  I want to refer to some charts and to what some very key individuals 
are saying about the R&D tax credit being extended on a permanent 
basis. Right now, it is not extended on a permanent basis. I think the 
National Association of Manufacturers is trying to address the 
question. I think they have said it very succinctly. They ask: Why 
worry? They say: because the R&D tax credit expires in 2 years and 
major R&D projects take an average of 5 to 10 years to complete.
  If we don't get this passed now and move forward, that is going to be 
another reason our economy will not move forward. I am very concerned 
about that.
  The Democrats in the Senate also recognize the importance of the R&D 
tax credit. I looked at what the majority leader said in January of 
2002. He said:

       We should act to make the research and development tax 
     credit permanent; the sooner the better.

  The action we are getting from the Senate today doesn't show any 
interest at all in moving forward in keeping up with the ``sooner the 
better'' pledge. This is a serious problem and a catastrophe.

       The R&D development tax credit is one of the most effective 
     mechanisms to encourage innovation, increase business 
     investment, and keep the economy growing.

  Again, that is the majority leader speaking on January 4 of this 
year.
  I am extremely disappointed that we will not have an opportunity to 
bring this amendment up for discussion.
  Just to again point out how important this amendment is to the 
economic recovery of this country to restore economic prosperity, I 
would like to show you a one-half-page ad from the Wall Street Journal.
  Mr. President, I show you an ad that was put in the Wall Street 
Journal from Ontario, Canada. It points out: ``The Future's Right 
Here'' in Ontario, Canada.
  They say:

       With pharmaceutical R&D spending up 300 percent in the past 
     decade, Ontario is proving to be an excellent locale for life 
     sciences.

  The reason they are saying that is because they have a research and 
development tax credit of which companies can take advantage.
  They go on further to say: ``Protection of intellectual property 
rights and R&D tax credits, [which are] among the most generous in the 
industrialized world, are a couple of key contributing factors'' and 
why it is so important to do business in Ontario.
  We are missing the boat. We need to do more to encourage economic 
research and development in this country. It is key to restoring 
economic prosperity.
  Again, I cannot emphasize enough how very disappointed I am that I am 
not going to have an opportunity, along with Senator Hatch, who has 
worked very hard on this particular amendment over the years, to get it 
passed on a permanent basis.
  In addition to what I have shown here, we have looked up studies that 
say the permanent extension may, in some cases, by 2010, increase 
domestic economic growth by $58 billion.
  We have the tax credit available for incremental research and 
activities in both the United States and Puerto Rico where 75 percent 
of research and development tax credit dollars go to salaries and wages 
of employees associated therewith. These are high-paying American jobs, 
and high-paying American jobs pay taxes. It is taxes that go to the 
Federal Government and help us balance our budget at the Federal level.
  So it is important. I am disappointed that not only my amendment but 
other amendments that would lead to economic growth in this country are 
not going to have an opportunity to be brought up. I cannot emphasize 
enough how very disappointed I am that this has been stalled because of 
action on the other side, even after we have had such positive 
statements made on January 4 of this year as to how we need to move 
forward with some of these tax cut provisions that stimulate economic 
growth, such as the research and development tax credit.
  Mr. President, I yield the remainder of my time to the Senator from 
Texas.
  The ACTING PRESIDENT pro tempore. The Senator from Texas is 
recognized.
  Mr. GRAMM. Mr. President, if the Senator will yield for a moment--I 
think this is the order in which we appeared on the floor--so we can 
all make plans, I ask unanimous consent that when the Senator from 
Texas finishes, I be recognized for 5 minutes, and then the Senator 
from Georgia be recognized for 5 minutes.
  The ACTING PRESIDENT pro tempore. Is there objection?
  Mr. GRAMM. And that following that, the Senator from Missouri be 
recognized for 5 minutes. I think that covers everybody present.
  The ACTING PRESIDENT pro tempore. Is there objection?
  Mr. GRAMM. I was just setting up a procedure where we can all speak.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  The Senator from Texas.

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