The U.S. House of Representatives may vote on a bill (H.R. 4438) as early as today that would make the Research & Experimentation (R&E) Tax Credit permanent. The R&E Tax Credit is a bipartisan issue, supported by both Democrats and Republicans to promote investment in R&E spending, innovation, and high paying manufacturing, production, and engineering jobs. In 2010 the Obama administration proposed to expand, simplify, and permanently extend the tax credit, noting that “every dollar of tax benefit stimulates as much as an additional dollar of private R&D spending in the short run and two dollars in the long run. Every $1 of R & D adds about $2 of benefit to our economy and society as a whole.”

Obama Administration Changes its Stance on R&E Tax Credit

In a statement released May 6, 2014, the White House threatened to veto the passage of H.R. 4438 which permanently extends and expands the R&E Tax Credit because it does not offset the projected additional $156 billion budget deficit. The current administration has its own proposal for making the tax credit permanent, but many believe the tax credit deficit is offset by the new economic activity it generates.