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Tax-Credit Vote Reveals Conflicted House Democrats Tax-Credit Vote Reveals Conflicted House Democrats

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Congress

Tax-Credit Vote Reveals Conflicted House Democrats

Some Dems back the bill, while others accuse GOP of a double standard by not finding a pay-for to fund the measure.

(Drew Angerer/Getty Images)

Defying a White House veto threat, nearly one-third of all House Democrats joined Republicans Friday in passing by 274-131 a bill to make permanent a research and development tax credit for businesses—even though its $156 billion cost over 10 years is not paid for.

In the end, 62 Democrats joined with 212 Republicans in approving the measure, as Republicans emphasized during this midterm election year that extending the tax credit was important to the economy and jobs. The previous credit had expired on Dec. 31, 2013.

Democratic leaders led by Minority Whip Steny Hoyer had joined the White House this week in making the absence of a spending offset an issue—even though they'd supported extending the tax break in the past and said its aim remained laudable.

 

But this time around, they insisted, Republicans were being inconsistent by backing such a bill, while at the same time insisting other items be fully paid for—such as an extension of emergency unemployment insurance.

Majority Leader Eric Cantor responded by calling Democrats "all talk and no action on jobs."

Clearly, some of the Democrats who ended up backing the measure were conflicted, including Rep. John Larson of Connecticut.

Although listed as a cosponsor with Republican sponsor Kevin Brady of Texas, Larson had actually voted against the bill when it was before the Ways and Means Committee.

In a statement, Larson provided a tortured explanation for why he voted in committee against the bill  that he sponsored, and then for it on the House floor, abandoning Democratic leaders. 

Larson said the R&D credit "impacts a large number of Connecticut businesses and manufacturers" and that "by encouraging investment in innovation, companies and manufacturers are better positioned to create economic development and job growth opportunities."

But he added, "Providing certainty and the ability to plan ahead is important to research, development and innovation and it should be applied equally across the board to the alternative fuel producer and to the teacher at our local schools ... i am disappointed that, rather than take up a comprehensive package of extenders, the majority has decided to pick winners and losers and further ignores how this will be paid for."

Still, said Larson, "I will not let the perfect become the enemy of the good."

Rep. John Campbell of California was the only Republican to vote against the measure, while 26 other House members did not cast votes on the bill, at all.

In a statement, he explained that, "Above all, we need to lower the corporate tax rate in this country. However, we cannot get to the point where we can lower this rate without eliminating all of the special credits first." 

"The R&D tax credit is one of the biggest and most unbalanced of these credits. Rather than reinstate it for only a select few industries, we should have taken this opportunity to lower the rate for everyone," said Campbell.

The future of the tax extender is in doubt, however. It is unclear what the Senate will do. And while the Office of Management and Budget has said it would advise the president to veto the measure, the White House has indicated support for it if it's paid for.

"I hope the Senate will quickly take up and pass this bill, and join Republicans in our ongoing effort to expand economic opportunity and security for all Americans," said Speaker John Boehner.

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