Research Tax Credit

Floor Speech

The SPEAKER pro tempore. The Chair recognizes the gentleman from Oregon (Mr. Blumenauer) for 5 minutes.

Mr. BLUMENAUER. Mr. Speaker, I supported the research tax credit legislation in the Ways and Means Committee, as I have done repeatedly in the past. I intend to do so on the floor as a first step in getting some certainty into a program that has been plagued with uncertainty for as long as I have been in Congress.

The tax credit has been extended 15 times without concern about whether or not it is ``paid for.'' Anyone who has been in Congress for awhile, in essence, has already voted to make it permanent and not pay for it.

Regardless of the budget rules, this is one area of investment that I think probably does pay for itself. It pays for itself in economic activity, scientific breakthroughs, and product development. It advances the interests of not just American companies, but of commerce and our overall economy.

As a country, we are consistently underinvesting in research. There is no substitute for the Federal Government playing the vital role that it has in the past with the development of the semiconductor, the Internet, and the basic role that it has played in dealing with health and medical research.

I don't like how this legislation has been handled. This is an issue that should have been characterized by bipartisanship, by working together to make the research tax credit more effective. We could consider making it refundable to help smaller emerging businesses. We could take a hard look at constructive criticisms that have raised questions about how we could make it work better. That should be our job.

Luckily, this is the start, not the end, of the process. There will be more work that will be done with our friends in the Senate under the leadership of Senator Wyden and Senator Hatch on the Senate Finance Committee, who have already started down this path.

What is very likely to emerge in the short term will not be a permanent but rather a 1- or 2-year extension. It is progress to get it reenacted and to signal broad support for its permanence and refinement.

All of the controversy surrounding tax reform underscores the fundamental challenge.

The inability of the Republican leadership to embrace the work product of Chairman Camp is illustrative. He worked diligently and produced a somewhat simplified code with a lowered tax rate and without adding to the deficit, which is essentially what Republican leadership Presidential ticket claimed they wanted.

Yet my Republican friends are unable to accept the necessary reductions in other tax benefits that come with the package. But there is bipartisan reluctance in this regard.

It illustrates that we are, I think, never going to get out of this box until we have another source of revenue. The most promising would be a carbon tax, which would be broadly distributed throughout the economy. It should be revenue-neutral, using the revenue raised to modify the impacts on lower-income citizens and businesses, and using the rest of the proceeds to keep it revenue-neutral could help us simplify the Tax Code. It might be the only way to reform the Tax Code.

Simplification costs money, which an aging and growing country needs to replace. The carbon tax will do that and will have the added benefit of providing greater simplification for energy-sensitive provisions and, by the way, will help us save the planet.

The report released this week by the administration on climate underscores the impact that climate change and global warming is having now. A carbon tax is the best way to exercise our leadership to change that process. I have long supported a revenue-neutral carbon tax, and will continue to do so, as the key to long-term tax reform and environmental protection.

In the meantime, I will continue to support individual tax provisions that are important to my community, that help our economy and protect and enhance the infrastructure. I only hope that we are able to make the transition so that we can do this in a more thoughtful and constructive fashion.

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