Jumpstart our Business Strength (Jobs) Act-Continued

JUMPSTART OUR BUSINESS STRENGTH (JOBS) ACT-CONTINUED

Ms. CANTWELL. Madam President. I rise today to express my support for amendment No. 2647 that, just yesterday, passed the U.S. Senate unanimously. I also thank every one of my colleagues for their support for what I believe is one of the greatest mechanisms for job creation and industry innovation. The amendment, of course, extends the research and development tax credit for 2 years.

The research tax credit, I believe, has demonstrated that it is a powerful incentive for companies to increase research spending. The tax credit lowers the cost of doing research in the United States, so it encourages companies to continue to make investments in critical R&D. And the bottom-line benefit is that research and development creates new jobs in the United States-something that is so vital right now for our Nation and for my State.

The current R&D tax credit is set to expire on June 30, 2004. Many of my colleagues, here, know we play this annual game of saying the R&D tax credit is important, but then not renewing it on a permanent basis, thereby denying companies and organizations the certainty they need to make these investments. The major investments in nanotechnology and biotechnology, in software, and in the computer sciences take several years of investments. Without a planning horizon of at lest several years, companies just won't put the money into R&D.

I am fully aware of the budget situation we are confronting, as Senator HATCH described yesterday. But, as my friend from Utah, stated, "[i]ronically . . . a permanent credit costs no more than one that is regularly extended." And while I am a cosponsor of this amendment with a short term, 2-year extension because I fundamentally believe that the R&D tax credit is so imperative, I must also say that permanency of the tax credit remains a high priority for me. It is only in the permanency of the R&D tax credit that businesses can truly create a strategic business plan. As it stands, companies have to take into account the fact that Congress could allow the credit to lapse for a few months. That causes companies to hedge their bets, spending a little less on R&D, and our economy suffers as a result. By contract, permanency helps planning; and the sooner we make this permanent, the sooner companies can begin to enlarge and expand their research and development units, and the sooner their innovations will strengthen economic growth.

Who has created jobs in the last decade? Who has stimulated our economy to move forward? It is a lot of companies that have invested in R&D. It is the Microsofts. It is the Amazons. It is the variety of biotechnology companies from my state and others making investments that have increased the productivity of their workforce, allowing them to hire new people as new products and services are delivered.

The research credit creates jobs. More than 90 percent of the costs eligible for the credit are salaries and wages paid to researchers. The only way for a company to increase its credit is to increase its R&D payroll in the U.S.

First authorized in 1982, the credit has been reauthorized eight times, with a gap from June 1995 to June 1996. As I mentioned, the current credit expires in June 2004. However, its effectiveness is limited because businesses cannot rely on it in their long-term planning, and most R&D projects are long-term. In order to provide stability and broaden the reach of this proven incentive, Congress needs to make the credit permanent.

I cannot stress enough how important private investment in R&D is. R&D is the engine that brings us new medicines, new medical technologies, cleaner manufacturing technologies, advanced weapon systems and other tools in the war on terror. Furthermore, growth in our high tech economy depends on solid R&D, and there is no good reason to delay making the credit permanent. A permanent tax credit will go a long way to providing the planners and investors the certainty that they need.

This amendment, having passed unanimously, shows the Senate's strong support for R&D. We have taken this one step forward; but let us not force these companies that serve as the engine for job creation to come back year after year for an extension of the R&D credit. Toward that end, I ask that we take this amendment one step further and make the research and development tax credit permanent.