[Congressional Record (Bound Edition), Volume 160 (2014), Part 6]
[House]
[Pages 7649-7652]
[From the U.S. Government Publishing Office, www.gpo.gov]




           AMERICAN RESEARCH AND COMPETITIVENESS ACT OF 2014

  The SPEAKER pro tempore. Pursuant to clause 1(c) of rule XIX, further 
consideration of H.R. 4438 will now resume.
  The Clerk read the title of the bill.
  The SPEAKER pro tempore. When proceedings were postponed earlier 
today, 28\3/4\ minutes of debate remained on the bill.
  The gentleman from Michigan (Mr. Camp) has 19\3/4\ minutes remaining, 
and the gentleman from Michigan (Mr. Levin) has 9 minutes remaining.
  The Chair recognizes the gentleman from Michigan (Mr. Camp).
  Mr. CAMP. I reserve the balance of my time.
  Mr. LEVIN. Mr. Speaker, I now yield 2 minutes to the gentleman from 
Maryland (Mr. Hoyer), our distinguished whip.
  Mr. HOYER. Mr. Speaker, I rise with a great deal of sadness. We are 
punting. USA Today said, ``House action on tax extenders forfeits 
credibility on deficits and national debt.'' They are right.
  The distinguished chairman of the Ways and Means Committee, who is my 
friend, offered a real bill on tax reform. The problem with that real 
bill was it had tough choices to make. Congratulations to the gentleman 
from Michigan (Mr. Camp) for having the courage to suggest those tough 
choices.
  This vote today requires absolutely no courage at all. It gives the 
ice cream and says forget about the spinach. It is the reason that we 
have trillions of dollars in debt today on our national debt, because 
we didn't pay for the '01 or '03 tax cuts.
  Now, Mr. Camp will tell me that I voted for R&D tax cuts six times 
that were temporary, that were annual, that were not a permanent change 
in the base. That is what the Republicans want to do. That is what they 
did in '01 and '03, and that is all inside jargon. And yes, they didn't 
waive statutory PAYGO, which we passed, which USA Today says was one of 
the reasons we got to balance 4 years in a row. That is why.
  The SPEAKER pro tempore. The time of the gentleman has expired.
  Mr. LEVIN. I yield the gentleman from Maryland an additional 1 
minute.
  Mr. HOYER. Mr. Speaker, I have 3 minutes to discuss with the American 
public why their country is going to be put deeper into debt by passing 
this legislation.
  It would be good legislation if it were paid for. It was good 
legislation when it was included in Mr. Camp's overall

[[Page 7650]]

tax reform bill. But it is very bad policy and very bad legislation in 
this unpaid-for, discreet form. And, by the way, there is about another 
$160 billion of debt to follow.
  What a sad day for America. What a sad day for this House. What a sad 
day for the Ways and Means Committee. What a sad day for fiscal 
responsibility.
  Mr. Speaker, I urge my colleagues not to vote for the temporary 
political benefit of saying you gave somebody a tax cut, but vote for 
fiscal responsibility. Vote to keep on a path of a big deal to solve 
the fiscal challenges that confront our country. I urge my colleagues 
to vote ``no.''
  Mr. CAMP. Mr. Speaker, I yield myself such time as I may consume.
  Well, I would just say that the gentleman from Maryland is correct. 
He has voted six times to extend the research and development tax 
credit without paying for it, for a total of 14 years.
  Look, I think it is time we are honest with the American people. If 
we are going to extend these policies again and again and again--in 
this case, 30 years--and not pay for it, look, we shouldn't have to 
raise taxes to keep taxes the same.
  So, again, I would urge my colleagues to support this legislation, 
and I reserve the balance of my time.
  Mr. LEVIN. I now yield 2 minutes to the gentleman from New York (Mr. 
Rangel), a distinguished member of our committee, to put it mildly.
  Mr. RANGEL. Mr. Speaker, I am opposed to this bill because I didn't 
think it was honest with the American people, and the chairman says he 
wants to be honest. I am just surprised that he is responding to this, 
because I don't think too many people believe this is on the level.
  The Senate has spoken on this issue. This is not going to become law. 
It is not Benghazi. It is not affordable care. So I would think that 
this has to be something else that we are preparing for in 2014. And I 
really don't think that the American people are going to go to sleep 
tonight wondering whether or not we take this billion-dollar bill--even 
though all of us love the concept of research and development. But so 
many people are going to be going to sleep hungry. They haven't got 
extended unemployment insurance. They need a variety of affordable 
housing. And now we are doing this for 2014. It doesn't fly. It doesn't 
get off the ground.
  Well, what I am saying to the chairman is that he has such a great 
start with the tax reform, something that we could have worked on 
together, to pick out one good thing that we have, even though we don't 
have money to pay for it, is an ideal thing for Democrats and 
Republicans to sit down and wonder, ``How can we make certain that 
America stays ahead in research and development?'' but to do this 
because we are running out of things to try to embarrass Democrats on 
is really not fair to our Nation. I really think our national security 
is being impacted because of our inability to work and get something 
done.
  So I oppose this, as any other thing that is just trying to find 
something to embarrass us, but I do hope for 2014 that we find 
something, anything--immigration, unemployment compensation--so that 
when we do get there there will be a Republican Party.
  I really love Democrats. But this used to be the party of Dixiecrats. 
Now they left us, and I want to make certain that they don't come back.
  Mr. CAMP. I reserve the balance of my time.
  Mr. LEVIN. Mr. Speaker, I yield 2 minutes to the gentleman from Texas 
(Mr. Doggett), a most distinguished member of our committee.
  Mr. DOGGETT. Mr. Speaker, this bill represents only the first of many 
installments of hundreds of billions of dollars that the Republicans 
plan to finance with more debt, borrowing from the Chinese or whoever 
will lend it to us. Surely we don't need any more research this 
afternoon to know that such an irresponsible approach is the wrong way 
to go.
  In January of last year, Republicans came to this floor and they told 
us that they had reserved H.R. 1 for a bill that would do it all. It 
was going to simplify the Tax Code, it was going to lower the rates, 
and it would not add a penny to the debt because it would all be 
financed by closing loopholes.
  Where is that bill? It is still reserved, and it will be reserved 
until the end of this term because the truth of the matter is 
Republicans could not stand up to the special interests that like those 
loopholes, that like the complexity of the Tax Code, that benefit from 
that complexity. They would not stand up to pass a bill that was 
fiscally responsible.
  Both parties, as the chairman has indicated, have repeatedly 
supported temporary extensions, but neither has had the audacity to 
come to this floor and say we are going to borrow enough to make it 
permanent without closing a single loophole. They are doing exactly the 
opposite of what they have repeatedly promised us and the American 
people that they would do.
  I support a permanent research and development credit to incentivize 
research for new products. It has never been a question of whether to 
support research, but how to do it and how to pay for it. And if the 
only goal is to encourage more job growth, there are ways we can 
redesign this credit to get even more growth than it does now.
  The Government Accountability Office said the credit in its current 
form is a windfall for some corporations, and some multinationals have 
used it as a way to get the taxpayer to subsidize research here and 
then shift the benefits overseas.
  I believe a better research credit on a permanent basis is the best 
way to encourage growth, not an irresponsible unpaid tax credit.
  Mr. CAMP. Mr. Speaker, at this time, I yield such time as he may 
consume to the gentleman from Texas (Mr. Brady), a distinguished member 
of the Ways and Means Committee and the chairman of the Joint Economic 
Committee.
  Mr. BRADY of Texas. I thank the chairman for yielding.
  Mr. Speaker, I was touring a hospital in the Rio Grande Valley the 
other day, and we were going through the critical care unit, with young 
babies 25, 26 weeks old who in past years would, frankly, have never 
survived. But today, because of medical breakthroughs, they will not 
only not have a lifetime of chronic diseases and disabilities, but they 
will live a full life because the medical breakthroughs and innovations 
developed here in America are giving them a life, frankly, their 
parents never hoped for.
  I see our veterans coming back from war, some of them with such 
terrible injuries, who not only are having their lives restored but, 
through these remarkable prosthetics, are living full lives that, 
again, wouldn't have been possible in recent years, even, because we 
are doing innovation here in America.
  Each day, we read of another U.S. company being courted to move those 
medical breakthroughs and that research overseas to other countries, to 
China, to Europe, to others. We are seeing America lose our edge in 
innovation, even though everyone knows--Republicans and Democrats--that 
the country that innovates the most will lead the world in economic 
growth, period. We know it.
  And I look at statements such as this. And I will read this. It is a 
direct quote:

       I believe it is critical that our tax system provide strong 
     incentives to help our manufacturing base. One of the most 
     important tax incentives for the manufacturing sector is the 
     research and development tax credit. Manufacturers do about 
     70 percent of the private sector R&D conducted in the United 
     States. I have long been a strong and persistent voice for 
     making the R&D credit a permanent part of our Tax Code and 
     strengthening it so that all companies have a strong 
     incentive to do R&D here in the United States.

                              {time}  1845

  That wasn't me; that wasn't Chairman Camp. That was our distinguished 
ranking member, Sandy Levin.
  He is not alone. Democrats and Republicans together long have sought 
a permanent R&D tax credit to make America competitive again. Make no 
mistake. Today, you have heard people

[[Page 7651]]

say this really isn't about supporting innovation, technology, 
biosciences and medical breakthroughs; today, it is about fiscal 
responsibility and pay-fors; yesterday, it was some other bills we 
wanted. The truth is that we can't afford these excuses, and that is 
what they are.
  Today, it is a clear choice between those who will stand for medical 
innovation in America, technology innovation in America, and energy 
innovation and manufacturing innovation that will create good-paying 
jobs and good-paying wages for Americans.
  I ask our Democrat colleagues to set aside the politics. We know it 
is an election year. Set that aside. Stay consistent with the values 
that you have said over and over again that the research and 
development tax credit needs to be made permanent, and let's send a 
bill to the Senate so that they, too--we can discover and learn whether 
they are willing to stand with their past, longtime statements that the 
R&D tax credit should be permanent.
  Mr. LEVIN. Mr. Speaker, I yield myself the balance of my time.
  Mr. Speaker, I support R&D. Mr. Speaker, I support it now. I have 
never voted to make it permanent without paying for it. So this bill is 
a dangerous dodge.
  Mr. Camp, you paid for what you suggested was permanent, and I salute 
your being forthright. That isn't what is happening, is not happening 
today. So this isn't only fiscally irresponsible. What it does is to 
threaten programs that we care about. What was not done with one hand 
yesterday, automatic cuts, will be done by the Republicans with the 
other. They will use this deficit to cut programs we care about 
mentioned earlier: medical research, Head Start, Pell Grants, and other 
extenders that we deeply care about.
  This bill today is, as I said, a dangerous dodge. We should not be 
party to it. We should not be party to it. It is irresponsible, it is 
hypocritical, and it is harmful to what we really care about and what 
the American people care about.
  I urge a ``no'' vote on this bill, and I yield back the balance of my 
time.
  Mr. CAMP. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, the research and development tax credit has been 
extended repeatedly by members of the other side and members of this 
side for nearly 30 years, and it has not been paid for in those 
extensions.
  But what does that really mean? Well, what we have done in America, 
which no other country has done, is we have taken a valuable tax policy 
like that, something that should be certain and dependable, and made it 
temporary. Not only do we make it temporary, we allow it to expire for 
a year at a time. So over this 30-year period, employers, innovators, 
businesses, and companies have not known whether they can count on this 
policy in order to do something really important.
  I heard Mr. Brady talk about the medical innovation and how critical 
that is to making peoples' lives better. I think of Big Rapids, 
Michigan, and Wolverine Worldwide, which makes military footwear and 
boots. They are constantly innovating that so that our military 
servicemen and -women have the best possible equipment on their feet. 
You can imagine the kinds of climates that we find our military in and 
how important this is.
  But if companies like that don't know whether this tax policy is 
dependable, yet we extend it 30 years backwards retroactively and 
forward for a year, then we allow it to expire for a year, it 
absolutely makes no sense. By allowing it to expire repeatedly, we have 
called into question whether this R&D credit is available at all.
  I would just say by supporting permanent policies--the reason it is 
so important to make this permanent, we can actually promote certainty 
for American businesses, and we need to generate certainly greater 
economic growth. The reason we are seeing the worst recovery since the 
Depression, 0.1 percent economic growth, none of us should be satisfied 
with that, and I don't think any of us are. We can generate more growth 
by making these things permanent. So we need to wake up to the reality 
and start offering some concrete solutions that really strengthen the 
economy and help hardworking taxpayers.
  Let me just say the nonpartisan Joint Committee on Taxation, which is 
our referee on these matters, says that if we make the credit permanent 
that actually more research and development will take place, the kind 
of innovation that really puts America at the forefront of job creation 
and an economy that is strong and vibrant, that up to 10 percent more 
research and development will occur. We certainly need more of that, 
because that is more jobs, more innovation, and higher wages.
  Let me just say that the President of the United States voted to 
extend the research and development tax credit unpaid for when he was a 
Senator. He signed legislation twice to extend the research and 
development tax credit unpaid for. I think 30 years of uncertainty has 
actually been a detriment--a detriment to U.S. business employers and 
certainly their employees because the jobs they provide are so 
dependent on our being at the cutting edge.
  Look, this is the 21st century. We can't live in the past as if these 
policies don't matter. This is a very competitive world, and most of 
our constituents understand the kind of competition that we face. We 
need to make this permanent. We need to do it now. Let's do something 
positive and good for America, something that we have repeatedly done. 
Let's be honest about it.
  Since we are going to extend it at some point temporarily another 2 
years, let's make this permanent. Let's make this certain. Let's make 
this something that our employers can depend on so they can create the 
kind of jobs that we haven't seen.
  With that, I yield back the balance of my time. Vote ``yes'' on this 
legislation.
  Ms. ESHOO. Mr. Speaker, I rise today in support of the American 
Research and Competitiveness Act of 2014, a bill to simplify and 
permanently extend the U.S. research and development (R&D) tax credit. 
Over the past thirty years, the R&D tax credit has been a key economic 
tool for businesses in my Silicon Valley district and across our 
country by directly rewarding business investment in R&D.
  At a time of great partisanship in Congress, I think the R&D we speak 
of today can be said to be `Republicans and Democrats' because of the 
bipartisan support this legislation enjoys. For years the R&D tax 
credit has been essential for out-innovating and out-competing the rest 
of the world, but now other countries are catching up or already have. 
While the U.S. was the first nation to offer a tax incentive for 
research and development in 1981, according to a study by the 
Information Technology & Innovation Foundation (ITIF), we now rank 27th 
out of 42 countries in terms of the generosity of the R&D incentives we 
offer.
  Congress needs to do so much more to improve our national economy, 
and updating the R&D tax credit is an important policy that will 
encourage businesses to invest in new technologies which in turn will 
create jobs and shape a better economy in our future.
  Nearly six months have passed since the R&D tax credit expired. To 
maintain our nation's competitiveness, let's not wait another day to 
give businesses the certainty they need to continue innovating and 
investing in America's future.
  I thank Representatives Kevin Brady and John Larson for their 
leadership in bringing this bill to the floor today and I urge my 
colleagues to support H.R. 4438.
  Ms. JACKSON LEE. Mr. Speaker, I rise in strong opposition to H.R. 
4438. This bill is the exact opposite of the fiscal conservatism which 
has been preached by the G.O.P.
  H.R. 4438, the American Research and Competitiveness Act, permanently 
extends the research and development tax credit that expired at the end 
of 2013, but modifies the credit to make it simpler to calculate.
  I think we can all agree that on the merits, the R&D Tax Credit is 
one of the most practical, useful, and well-subscribed tax credits. Not 
only do large multinationals and many small research facilities use it; 
but numerous universities, including the University of Houston, the 
University of Texas, Texas Southern University, Texas A&M, and Texas 
Tech, among others, also take advantage of this job-producing credit.
  Yet, the Republicans hypocritically failed to do something which they 
usually love to take credit for--and that is--to PAY for the bill by 
including an offset.

[[Page 7652]]

  It provides no offset for the cost, which the nonpartisan 
Congressional Budget Office estimates would reduce revenues by $156 
billion over 10 years. This bill is the first in a series of individual 
tax ``extenders'' that I understand the Republican House leadership 
intends to consider. And make no mistake, this bill, and the others 
likely to follow, blow a hole in the deficit. Though at some point in 
the near future, President Obama will somehow be blamed for this.
  This is a textbook example of Congress picking winners and losers.
  Many of us support the R&D tax credit but there is no excuse for not 
offsetting the cost of the bill, noting that permanently extending the 
R&D credit and five other tax provisions that GOP leaders want to act 
on would add $310 billion to the deficit.
  Two years ago my Republican colleagues managed to hijack the 
legislative process and increase the federal budget deficit by 
insisting on an extension of the Bush Tax Cuts, originally enacted in 
2001 and 2003.
  These tax cuts cost $1 trillion a year to extend and while many are 
critical to individuals and businesses, the fact remains that if we are 
going to have a serious discussion about tax reform and balancing the 
budget, Congress cannot simply ignore the other side of the ledger: 
revenues. In addition, Congress cannot and should not be in the 
business of picking winners and losers.
  Again, it is ``hypocritical'' that our Republican friends won't 
offset the R&D credit but let emergency unemployment insurance for the 
long-term unemployed expire because they claim that we could not find 
an offset that they would support.
  I ask my colleagues to reject this bill and end this partisan 
lawmaking.
  Mr. HOLT. Mr. Speaker, I rise in support of this legislation, which 
is especially important to New Jersey, one of America's most research-
intensive states. Yet I must ask how my Republican colleagues can 
support this tax expenditure while opposing all other forms of 
government spending.
  Republicans say America can't afford to pass unemployment insurance 
for 2.5 million Americans struggling to find work. NIH is at the lowest 
funding in three years, distributing fewer and fewer grants, but we 
can't afford to fund scientific and health research. There is a $2 
trillion transportation backlog, but we can't afford to repair and 
upgrade our roads, bridges, tunnels, and dams. Yet somehow, they say we 
can afford special tax cuts?
  That's nonsense. To quote Martin Feldstein, the former chief economic 
advisor to Ronald Reagan, ``These tax rules . . . are equivalent to 
direct government expenditures.''
  The distinction between tax expenditures and direct spending is one 
that only Grover Norquist could love. If America can afford this tax 
cut--and indeed we can--then we can afford to do so much more.
  So I thank Republican leaders for correctly acknowledging the role of 
government investment in our economy. And I call on them to use this 
same logic to find more ways to invest in America. Let us pass a 
transportation bill that funds our roads and bridges. Let's meet the 
funding goals for scientific research that we set in the 2007 and 2010 
COMPETES Act. Let's help the millions of Americans looking for work 
with the support they need. We can do better. The American people 
deserve better.
  Ms. BONAMICI. Mr. Speaker, I rise in reluctant opposition to H.R. 
4438, a bill to extend permanently the research and development tax 
credit. This is not an issue that I take lightly because this tax 
provision enjoys broad support in my district. But once again, a policy 
that has long enjoyed bipartisan support and has real economic impact 
in districts across the country has fallen victim to politics. Rather 
than advancing a package of tax extenders that places the priorities of 
working families and underwater homeowners alongside those of our 
business community, we are considering legislation that singles out the 
interests of one group over another.
  Following the expiration of numerous important tax provisions at the 
end of last year, many constituents have contacted me to express their 
concerns about our inaction. From families who rely on the Earned 
Income Tax Credit to make ends meet, to renewable energy companies that 
will drastically scale back operations without the Production Tax 
Credit, to municipalities who use the New Markets Tax Credit to 
revitalize low-income areas, the scope of people and businesses that 
will suffer the consequences of inaction on a tax extenders package are 
too numerous to list here. To those who are looking to Congress for 
some indication that we are moving past political maneuvering, past the 
dysfunction that has characterized this body for too long, this bill is 
a step in the wrong direction.
  Beyond the frustration that is felt at elevating this tax provision 
over the others I have previously mentioned, my constituents will 
wonder why we can pass this legislation and add about $150 billion to 
the deficit, but we can't add a dime to extend emergency unemployment 
insurance benefits to millions of Americans. To advance this bill is an 
affront to the long-term unemployed who have been falling deeper into 
debt as Congress debates how it should pay for an extension of the 
vital benefits that could help keep them afloat while they continue to 
search for work.
  I support extending the tax credit for research and development. It 
is vital to promoting American manufacturing and supporting our 
country's innovative technology sector, which is exemplified by the 
work done by companies like Intel in my district. But I support 
extending this credit alongside a package of others that also benefit 
my State, and every State in the country. Congress should consider a 
comprehensive tax extenders package, and should do so without delay.
  The SPEAKER pro tempore. All time for debate has expired.
  Pursuant to House Resolution 569 and House Resolution 576, the 
previous question is ordered on the bill, as amended.
  The question is on the engrossment and third reading of the bill.
  The bill was ordered to be engrossed and read a third time, and was 
read the third time.
  The SPEAKER pro tempore. Pursuant to clause 1(c) of rule XIX, further 
consideration of H.R. 4438 is postponed.

                          ____________________