American Research and Competitiveness Act of 2014

Floor Speech

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Mr. VAN HOLLEN. Mr. Speaker, I want to thank my friend and colleague, the ranking member of the Ways and Means Committee, for all the work he has done on tax policy to make sure we have a tax policy that is both pro-growth and works for the country. And I want to commend the chairman of the Ways and Means Committee for his efforts on tax reform.

I wish what we were doing today was talking about real tax reform. Many of us agree that we need to reform our corporate Tax Code, that we do need to deal with the rates and we need to deal with the base.

But that is not what this is about. The Speaker decided not to bring before this full House the tax reform bill that the chairman of the Ways and Means Committee has worked on, and that is not what we are dealing with today. Nor is what we are dealing with today whether we are for or against the research and development tax credit.

The chairman of the committee said there is bipartisan support for the R&D tax credit. I agree, it is a pro-growth tax policy.

The issue is whether we extend it on a permanent basis and unpaid for, not one penny of it paid for. The chairman mentioned that we had raised this on an annual basis in the past. That is true. One of the reasons we didn't take it up on a permanent basis was because everybody realized what impact it would have on our long-term deficit and said, you know, that is not good fiscal policy, that is not good fiscal discipline, let's try and work together to get it done in a fiscally responsible way.

But instead of doing that, we now have our colleagues coming forth and doing it in a way that puts it on a credit card, puts it on a credit card. Not one penny is paid for. We have this R&D tax credit bill before us today. There are four other business tax incentive bills that are coming out of the Ways and Means Committee. Together they add $310 billion to the deficit. That means $310 billion on our national credit card.

Now, what is interesting is it was probably less than a month ago that on the floor of this very House we had a debate on the Republican budget. We were told then that the most important thing we could do for long-term economic growth was to reduce long-term deficits. That was the be-all and end-all. It is important. And do you know what? We agree it is important to reduce the long-term deficits. The question is not whether, it is how.

So we proposed, in addition to some of the cuts we have already made in this House, that we also close some of the unproductive wasteful special interest tax breaks that happen to go to different interests around the country, not because it is important to our economy, not because it helps the economy grow, but because they happen to have a lot of influence here in Washington. So we should get rid of some of those to help pay for pro-growth tax policy like the R&D tax credit. But our Republican colleagues said no. They wouldn't close one, not one special interest tax break to help reduce the deficit, not one.

So here we are today after all that talk just a few weeks ago about reducing the deficit doing a permanent and unpaid-for extension of the R&D tax credit--the first installment of, as I said, five bills that will add $310 billion to the deficit, all on a credit card.

In fact, Mr. Chairman, I don't know if all the Members know, they had to waive their own rules because this bill is inconsistent with the budget that was passed in this House a few weeks ago--inconsistent. In fact, if you look at the five bills coming forward, they put the Republican budget at a balance even on its own terms. They used funny math to claim that their budget was balanced. They actually used the revenue from the Affordable Care Act--ObamaCare--even when they said they are getting rid of it. But let's give them that for a moment.

By their own terms, these five bills now mean that their own budget, Republican budget, is not in balance anymore. We are in favor of the R&D tax credit. We would like to find a way to permanently extend it, but let's do it in a fiscally responsible manner.

Here is the thing, Mr. Chairman--all of us know

this. When you don't pay for it, when you put it on a credit card, at the end of the day somebody is paying for it. Now, last night we pointed out that the Republican proposal was actually going to pay for it by hitting Medicare. They left in place a Medicare sequester under statutory PAYGO. They were going to ask Medicare to pay for these tax credits. I am glad they reconsidered that. But at the end of the day someone has got to pay. Who pays?

Let's go back and look at the Republican budget from a few weeks ago. I will tell you who pays. Because that budget refuses to close any of those wasteful tax breaks, whether it is for corporate jets--whether it is for big oil companies, whether it is for hedge fund owners--because they refuse to do any of those to reduce the deficit they come after our kids' education: deep cuts in Head Start, deep cuts in K through 12, deep cuts in helping more students afford college, deep cuts in medical research, scientific research. We are talking about the importance of giving the private sector incentives to invest in R&D--that is right.

But when you cut the nondefense discretionary budget by 25 percent compared to now over the next 10 years, you are also cutting our capacity as a country to invest in cutting-edge R&D. After all, there were Federal Government investments that helped launch the Internet, which has had huge economic benefits. Investments in scientific research at NIH, huge benefits.

That's why it is so important to do this in a fiscally responsible manner. Because when you add $310 billion to the deficit somebody pays at the end of the day.

What we have said is, let's pay for it in a way that makes sense, a combination of cuts, many of which have been made, but also getting rid of the unproductive wasteful tax breaks that are in the Tax Code, which are there not because of the economic benefit, but because of the power of a lobby here in Washington.

I would hope we would go back to what the chairman of the committee actually wanted to do when he started the effort of tax reform a couple of years ago and beyond, which was, yes, let's do real tax reform, let's do it in a way that makes sense, let's do it in a way that doesn't bust the deficit wide open and leave our kids having to pick up the tab either through higher interest rates or cuts to their education. That is not right.

I urge my colleagues to vote against this legislation.

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