The House voted 274-131 on Friday to permanently extend and expand the research and development tax credit that expired at the end of last year.
The bill championed by the business community would cost $156 billion over 10 years with no offset. Sixty-two Democrats joined all but one Republican in support. Those Democrats included centrists like Reps. Mike McIntyre (N.C.) and John Barrow (Ga.), along with Silicon Valley representatives like Rep. Mike Honda (Calif.)
"Making the R&D tax credit permanent is an important first step to achieve growth and put us on a path to comprehensive reform," said House Ways and Means Committee Chairman Dave Camp (R-Mich.).
The research and development credit, which has been extended on a short-term basis roughly 15 times over the last 30 years or so, expired at the end of last year, along with more than 50 other tax breaks.
"With the American economy sputtering along, this bill will create an opportunity we simply cannot afford to pass up," House Majority Leader Eric CantorEric CantorGOP shifting on immigration Breitbart’s influence grows inside White House Ryan reelected Speaker in near-unanimous GOP vote MORE (R-Va.) said.
Democrats said that they supported the research and development tax credit generally but not on a permanent basis without an offset.
In the process, they accused Republicans — who rode to the House majority in 2010 by calling for more fiscal discipline — of being hypocritical.
"It's a pro-growth tax policy. The issue is whether we extend on a permanent basis and unpaid for," said Rep. Chris Van Hollen (D-Md.).
Camp noted that Van Hollen had previously voted multiple times to extend the credit without any pay-fors. But Van Hollen said that none of those votes were to prolong the tax credit on a permanent basis.
"That's very different than a permanent, unpaid for extension. I think the people can do the math," Van Hollen said.
Democrats also noted that Republicans refuse to renew unemployment insurance due to concerns that it would add to the deficit.
"HR 4438 would add $156 billion to the deficit to provide permanent tax breaks for businesses while doing nothing for the 2.6 million Americans who live in the constant nightmare of long-term unemployment," said Rep. Danny Davis (D-Ill.).
The White House issued a veto threat against the measure.
The Senate Finance Committee last month approved a two-year $85 billion package to extend more than 50 tax breaks, also without offsets.
The Senate is expected to vote on the full Finance Committee package in the coming weeks, instead of extending individual credits at a time.
Lawmakers overseeing tax policy though have indicated that a final deal to extend all of the expired credits might not come until after the midterm elections.
— Bernie Becker contributed.