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Public Statements

Small Business Lending Fund Act of 2010

Floor Speech

By:
Date:
Location: Washington, DC

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Mr. HATCH. I thank my colleague from Iowa. I appreciate his leadership on the Finance Committee and the good work he has done over all of these years.

Mr. President, in accordance with rule V of the Standing Rules of the Senate, I move to suspend rule XXII, paragraph 2, for the purpose of proposing and considering the following motion to commit, which is at the desk with instructions to H.R. 5297. I move to commit H.R. 5297 to the Committee on Finance with instructions to report the same back to the Senate with changes to include a permanent extension of the research tax credit.

This motion is a simple one. It is a motion to suspend the rules to allow for the consideration of the motion to commit the bill before us to the Finance Committee, from which both Senator Grassley and I sit, with the specific instruction to add to the bill a permanent research tax credit.

It is a simple motion, but I believe it is a significant moment. The American people understand that there is a desperate need for jobs and growth, and they have heard that Washington is partisan, broken, and unable to respond to their genuine needs. Just last week they heard that President Obama proposed a permanent research credit as an additional step ``to grow the economy and help businesses spur hiring.''

Well, we can address all three with my simple motion: Make the research credit permanent, do it in a bipartisan spirit, and give job creation the jump start it badly needs. It seems like a pretty good idea to me, but the track record so far is very disappointing. Making the credit permanent is exactly what Senator Baucus, the distinguished chairman of the Finance Committee, and I proposed to do in the bill we introduced last year.

We have been introducing this same idea for many years now. Yet the Senate does not seem to be able to do anything more than extend the credit on a very temporary basis. In recent weeks, I have been trying to add a research credit extension to the small business lending bill that is before us today. Unfortunately, my efforts have been in vain because the leader has filled the amendment tree, and I have not had the opportunity to offer such an amendment to this bill.

Frankly, the way this Senate has been run, there has been very much to criticize. This is supposed to be the most important deliberative body in the world. Yet almost every bill that has any controversy to it at all, they bring it to the floor, fill up the tree, forbid the minority to have any chance to have any amendments, and in the process stultify the legislation.

It is easy to see why adding a research tax credit incentive to this bill is a high priority. Obviously, President Obama thinks it should have a high priority. He was very specific last week in making it clear that this is a step we should take to grow the economy and to help businesses spur hiring, bringing people onboard to work. Here we have a small business tax bill that has been proposed by the majority party. Yet it does not include a very important provision that has long enjoyed bipartisan support by most Members of the Senate. Now we have the President of the United States specifically calling for this provision to be enacted to grow the economy and help businesses spur hiring, for which I give him great credit.

This, too, I believe is the underlying purpose of this small business bill. What is strange is my pleadings for this provision to be added to this bill have so far fallen on deaf ears. Therefore, I have had to resort to this procedural motion to suspend the rules in order for this provision to be added to the bill.

Since the parliamentary tree is tied up and we do not even have a chance for amendments, I could not bring it up as an amendment other than this way. I would have thought this would have been unnecessary. After last week's proposal by the President, I would have expected that Members of his own party might have acted to include the research credit extension on the first possible legislative vehicle. This bill is that vehicle.

But, no, this bill is moving forward toward passage in the Senate with nary a word from the majority about the provision the President proposed last week. He said it was important. He wants it. It is something we ought to do. Above all, it would be bipartisan, one of the few things we have been able to do in a bipartisan way since this administration took over.

Perhaps most of my colleagues on the other side were on the beach and away from the television and the newspapers and did not see or know about the President's call for a permanent research credit. For those of my colleagues who might not have heard about the President's call for a permanent research credit, let me share a couple of facts that he, our President, put forward.

He said a permanent extension of the research credit is ``a win-win--encouraging job growth and investment now that will pay off with stronger economic growth in the future.'' Again, I could not agree more with the President.

President Obama also said economic growth is the single best way to bring down the deficit. There are some things our President says that make a terrific amount of sense. This is one of them because this bill before us today is supposed to be all about job creation and growing the economy. Because the President has renewed his call for a permanent extension of the very important research credit, it seems to me this motion would be unnecessary. I would have thought, as I said before, that the leadership would have taken care of adding this item to this bill.

I think most everyone will agree that this might very well be the only tax bill that even has a remote chance of passage and enactment before the election next month. Surely the majority leader does not plan to simply ignore
the President's call for passing a permanent extension of the research credit.

Well, since he either forgot to add this priority or decided to ignore the President, I am offering this motion as a way to remind him and a way to allow it to happen before this bill comes up for a final vote. I urge all of my colleagues to consider the implications of this country dropping to a second tier industrial power.

Our economy has been, both short term and long term, filled with problems. In the short run, we are not

producing the number of new jobs we need. Our economy is not growing nearly as rapidly as we would all like. It is not generating nearly enough moneys or enough revenue to the Treasury. In the longer run, we are facing some severe competitiveness issues with our U.S. firms in competition with foreign firms. The Federal Government has, unfortunately, saddled them with the high taxation, more onerous regulations, and an unfriendly business climate. We have the second highest corporate taxes in the world.

In the high-technology area, along with other sectors of our economy that are even more global in nature, we have even more difficult challenges. Our international tax rules are very inhospitable to U.S.-based firms. This is one of the reasons the United States no longer dominates the list of having the largest companies in the world. In fact, in 1980, of the 50 largest companies in the world, we had 39 of them headquartered in the United States. Today we have just 16. It is because of these stupid rules that have been put in place, these stupid tax approaches that we must change if we want to do something about jobs in our society today.

One particular danger is that many of our trading partners have enacted very generous tax incentives in an attempt to lure away research and development from our country to theirs. There was a time not very long ago when the United States was considered the only real place in the world where companies wanted to conduct their research and development.

We had the best research scientists and the best facilities in the world. That time is no more. We can no longer make this boast. Many other places offer world-class facilities and scientists just as well trained and experienced as ours, many of whom have been trained right here, and we push them out of our country because we will not expand our H1B immigration rules. Talk about stupidity.

Now they also offer tax incentives to companies that are far superior to our country's tax incentives for our companies and for companies overseas. In fact, at this time we can offer no tax incentives for U.S. research and development because the credit expired last December. The research tax credit is a provision that has been in the tax law since 1981. It has been extended by Congress more than a dozen times.

This credit has wide and deep bipartisan support in this body as has been demonstrated numerous times. More importantly, however, is the fact that the research tax credit is a vital incentive to business enterprises of all sizes in this Nation.

In my home State of Utah, there are hundreds of small high-technology companies, companies and firms, that spend a high percentage of their revenue on research and development. In fact, Utah has more than 5,000 technology companies. Every State wants to attract companies such as these because their jobs are generally better paying private sector jobs than most private sector jobs.

On average, high-tech jobs pay 69 percent more. This R&D is vital to the future survival of these firms. No high-tech company can afford to ignore research that wants to be around next year or maybe even in the next quarter. The research credit is, in my thinking, the most urgent and important to our economy, our competitiveness, and to those hundreds of smaller high-technology companies in Utah.

We have before us on the Senate floor a small business bill. This bill is designed to strengthen our small businesses, which most of us acknowledge comprise the strongest component of our job creation engine in this economy

to help them to do what they obviously are not doing very well at this time, and that is to grow and bring on more new workers. The tax portion of this small business lending bill is a good package that I support.

I think we do need to pass the tax provisions in the bill before us. However, it would be a grave mistake for us to think this is all we need to do to solve job-creation problems in our economy--far from it. We should be adding many provisions to this small business tax bill. These include the extension of the tax relief provisions passed in 2001 and 2003. That tax relief is important. However, since that is the subject of an intense partisan debate in the Senate right now, it does not seem possible. It seems reasonable, however, that we could all agree to add the most prominent tax provision the President is calling for--a bipartisan provision, the research and development tax credit--and make it permanent. It has wide and deep support on both sides of the aisle, here and in the House. Republicans are saying yes to the President on this. It is the members of his own party who seem to be saying no, even though I think most of them will vote for this if it has a chance to be heard and voted upon.

As Congress tries to address the job situation, we need to keep in mind that one of the best things we can do to retain and create good jobs in the United States is to incentivize research activities. One of the best ways of doing this is to ensure we have an effective tax policy to keep research here in our own country. Unfortunately, many of our trading partners now have strong tax inducements for companies to perform research overseas. Research and development jobs are high-paying, and they are very desirable jobs.

Moreover, R&D very often leads to other kinds of economic development and the creation of even more jobs. We simply cannot afford to lose our lead in research by not keeping the United States as the premier location in the world for research and development. Having a robust research credit is key to this. The President understands it is the key. I surely hope my colleagues will wake up and help make this happen before it is too late and we have to work to get back what once was ours.

My understanding is that some might go along with this, but they want to increase taxes on oil and gas. They also want to do some other very obnoxious things that would be difficult for which to get bipartisan support.

We know that business in this country is having a very difficult time right now. My understanding is that they may want to add a carried interest provision, which would probably put a lot of venture capital funds out of business and would drive a lot of people out of business and maybe into bankruptcy. We simply cannot support that. We can support--and I think we would have almost 100 percent of the votes here in the Senate--the research tax credit. I believe it would show great bipartisanship at a time when it is needed. I think it would even benefit our Democratic colleagues to work with us on this.

But there are things in this underlying bill that really are very difficult to vote for--one part of it is, in the eyes of many, a new mini-TARP, the Troubled Asset Relief Program. We have seen how bad the last one worked. I hate to see us go further down that path when we could, in a bipartisan way, resolve these problems.

Last spring, four of us on the Finance Committee worked out an extenders package. We worked diligently together. We agreed on how it should be done. It was bipartisan in nature. I believe my friends on the other side initially agreed to it because it would have gotten at least 95 votes in the Senate. It could have been done early enough to create a lot of jobs this year. Then all of a sudden it became a partisan exercise again.

Time after time, if the Democrats can get one Republican to go with them, they call it bipartisan. I guess one could say that, but that is really stretching the term bipartisanship, especially when I think we could have had virtually 100 percent, or at least 95 votes for the extenders package we had worked out.

It is amazing to me how difficult it is to work together around here, especially when we want to and especially when we can come up with programs and legislation to which virtually everybody in this body would agree. It is almost like an arrogance of power: We are just going to teach those Republicans that we are not going to do what they think is good. I hesitate to say it, but I think that had we had more bipartisanship around here over the last year and a half, we would be a lot further along. This economy would be back in a much stronger way, and there would have been a lot of jobs created.

If we are just going to keep playing partisan games on these very important bills on which we should all agree, then it stultifies jobs and the economy. I think it makes this administration look bad. In the process, it creates a lot of angst and anger throughout the whole country.

We would have had this done; it would have been done early this year had it not been for partisanship, in my opinion. There are things to be partisan about. There are things on which both sides disagree vociferously. That is the way this body works. We should go after each other on these matters. But there are some things on which we can all agree.

When the President comes out and says we need a permanent research tax credit, after all of the difficulties we have had, one would think our colleagues on the other side would grab Republicans and run with it. We could get it done, as we have always done in the past. There is no certainty with the current research tax credit, or the one that expired last year. Companies cannot plan for the future because we have to reinstate this all the time. Sometimes it is late, and even if we make it retroactive, it is not as helpful as it would be. Making it permanent would be a tremendous boost to scientific companies in this country and all other companies where innovation can occur. We have seen great results from the research and development tax credit.

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Mr. HATCH. Madam President, last week President Obama called for a permanent research tax credit. We have always extended this tax credit. We failed last December to do it on time. Therefore, we are without it. We are without the jobs that would be created by it. I think it was a terrific move by the President to come out for a permanent research tax credit, and we ought to swiftly move to add it to this particular bill.

The only way I can do that, because of the tying up of the tree--which is happening all too often around here--is by a motion to suspend the rules.

This bill is a bill to create jobs. At least that is what it is supposed to be. But the research tax credit would do the most to instantaneously create jobs, and these are high-paying jobs. The only way we can get it is to vote for this motion to suspend. If we do, I think we would have 95 votes--a bipartisan vote--for this particular amendment.

I urge my colleagues to support the motion.

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