The Republican-controlled House voted Friday to permanently extend and expand an expired business tax credit for research and development expenses, defying a veto threat from the
There is broad bipartisan support for the tax break, which is strongly supported by business groups. But there is sharp disagreement in Congress over how to pay for it and the House vote split largely along party lines.
A permanent extension of the tax credit is a top priority for California firms, particularly high-tech companies. The credit expired in December along with many other temporary tax provisions.
The 274-131 House vote Friday included 62 Democrats joining with all but one Republican in support of making the research and development tax credit permanent.
Rep. John Campbell (R-Irvine), the lone Republican to vote against the bill, said he wants to lower the overall corporate tax rate by eliminating specialized tax credits.
"The r&d tax credit is one of the biggest and most unbalanced of these credits," Campbell said. "Rather than reinstate it for only a select few industries, we should have taken this opportunity to lower the rate for everyone."
But the White House issued a veto threat this week, complaining the bill would add to the deficit because the $156 billion it would cost to make the expanded r&d tax credit permanent was not offset by new revenue or budget cuts.
Obama wants to pay for the additional costs by closing unspecified tax loopholes.
Most Democrats support the White House position and the
Instead, the Democratic-controlled Senate is planning to consider a retroactive two-year extension of the r&d tax credit along with extensions of other expiring tax provisions.
"It's whether we make this permanent without paying for it," he said. "It's fiscally irresponsible to do so, and it endangers key programs that matter for all Americans."