With Congress stumbling down the final stretch for a 2007 federal budget,
President Bush renewed his call Tuesday for a competitiveness initiative in the
United States. In particular, he urged lawmakers to pass a permanent extension
of the R&D tax credit.
The latest R&D tax extension expired on December 31. Congress passed the first
R&D credit bill in 1981, and it has expired 12 times since then. Both the
House and the Senate have included a new, expanded credit in their 2007
budget bills but efforts to reconcile differences in the two bills have
stalled.
In both bills, however, lawmakers only extend the R&D tax credit for one
year. The proposal calls for allowing companies to receive a tax credit of
up to 10 percent of R&D spending.
“The problem we have in America is that the research and development tax
credit expires on an annual basis,” Bush said.
“And if you’re somebody
trying to plan for the next five years, or the next 10 years, which a lot of
smart people do, it’s difficult to do so if every year you’re wondering
whether or not the Congress or the president is willing to stand up and
support the research and development tax credit.”
Speaking at Magnet Middle School for Aerospace Technology in suburban
Washington, Bush said making the R&D tax credit permanent is a way to make
sure the United States remains competitive.
“One way to encourage people to invest corporate funds is through the
research and development tax credit,” he said. “In other words, it’s a use
of the tax code to say, this is in your interest — by the way it’s in our
collective interest, as well — but it’s in your interest, your corporate
interest to invest so that your product line remains modern so that your scientists that work for your company are able to have funds necessary to continue to think anew.”
Bush also urged Congress to “double the federal commitment to the most
critical basic research programs in physical sciences over the next 10
years.”
The 2007 White House budget proposal calls for a 7.9 percent increase to
$6.02 billion in funding to the National Science Foundation. Bush’s budget
also seeks a 24 percent increase to $535 million for the National Institute
of Standards and Technology.
“Investment at the federal level in research has led to practical
applications which improve the lives of our citizens,” Bush said. “One way
to make sure this country is the economic leader of the world so that our
people benefit and can find work is for there to be a federal commitment to
research.”
Both the House and the Senate are currently drafting appropriations bills,
and the fate of Bush’s proposal is still unknown.
The president also wants to commit $380 million in new federal support to improve the
quality of math, science and technological education in K-12 schools.
“If our children do not have the skill sets for the jobs of the 21st
Century, the jobs are going to go somewhere else. And it’s a fact of life.
It’s a part of the real world we have to deal with,” Bush said Tuesday.
The president then called for the federal government to help train 70,000
high school teachers in advanced placement education and set a goal of having
30,000 math and science professionals in American classrooms over the next
eight years.
The House passed an amendment to the Higher Education reauthorization bill
calling for advanced placement classes and an adjunct teacher corps for
middle schools and high schools. The Senate has taken no action on the president’s
proposal.
