OVERNIGHT FINANCE: R&D tax credit up in the House

by Vicki Needham and Bernie Becker - 05/07/14 7:10 PM ET

THURSDAY’S BIG STORY:

Next up for the House: R&D. The House is scheduled to consider on Thursday a permanent extension of the popular credit for business research and development.

GOP leaders and tax writers say the $155 billon measure is a no-brainer.

The tax break, they say, is a proven job creator, and extending it permanently would end the charade of having the credit extended on a start-and-stop basis approximately 15 times for more than three decades.

{mosads}Top business groups, like the Business Roundtable and the U.S. Chamber of Commerce, also back the permanent extension of the credit, one of more than 50 temporary tax breaks that expired at the end of last year.

House Ways and Means Committee Chairman Dave Camp (R-Mich.) has proposed extending several of those tax breaks, commonly known as extenders, for the long-term, a tactic which he thinks could help the broader goal of tax reform down the line.

But Democrats say the GOP push on the bill is nothing more than hypocrisy. Democrats have noted that Republicans have long cast themselves as the party of fiscal responsibility, but are now pushing to extend the research credit without offsets.

At the same time, Republicans have balked at extending emergency unemployment insurance, which costs much less, without offsets.

(Of course, this tactic also has put some Democrats in the position of coming out against tax legislation they co-sponsored just weeks ago.)

Still, GOP aides have expressed confidence that the research credit will make it through the House.

The Club for Growth has said it’s not key voting the measure, arguing that it thinks in the long run the research credit will just be extended on a short-term basis like in the past.

The group opposes the $85 billion Senate tax extenders package, which extends most provisions for two years and isn’t paid for.

Several conservative lawmakers told The Hill on Wednesday that the positives of extending the credit permanently outweighed concerns about the cost.

But at least one prominent conservative, Rep. Mick Mulvaney (R-S.C.), said he was firmly undecided on the measure and that he agreed with the Democratic criticism of the bill.

“The worst kind of criticism, when people call you a hypocrite, is when they’re right,” Mulvaney said.

“The most damaging type of criticism is the criticism that’s accurate.

“I’m looking forward to hearing how my side is going to make the argument that you have to pay for UI but you don’t have to pay for this,” he added.

WHAT ELSE WE’RE WATCHING

Day two: Federal Reserve Chairwoman Janet Yellen returns to Capitol Hill for her second appearance in as many days on Thursday, this time to chat with the Senate Budget Committee.

Yellen refused to set out a specific timeline for the Fed’s next interest rate hike despite pressure from Republican lawmakers during Wednesday’s hearing at the Joint Economic Committee.

“The answer is that it depends on the evolution of the economy,” she said. “I’m afraid I can’t give you a timetable.”

She said to expect stronger economic growth in the coming months, which should allow the Fed to complete the taper of its monetary stimulus this year.

CJS markup: The House Appropriations Committee will mark up on Thursday its $51.2 billion Commerce, Justice, Science spending bill for fiscal 2015.

Lew’s back, too: On Thursday, the House Financial Services Committee is set to chat with Treasury Secretary Jack Lew about the state of the international financial system. But expect the conversation to shift toward other hot topics from Dodd-Frank to regulations and Ukraine aid.

More noms: The Senate Finance Committee will talk to four of President Obama’s nominees — three to join the Social Security Advisory Board and one to work as the nation’s chief agricultural negotiator for the Office of the U.S. Trade Representative — about their qualifications.

College unions: In the wake of the Northwestern University decision, the House Education and the Workforce Committee on Thursday will discuss the issue and weigh the effects of labor unions on college campuses with academic and legal experts.

Time to travel: A Senate Commerce, Science and Transportation subcommittee will discuss the combined Obama administration and travel industry’s efforts to boost travel to the United States and attract 100 million visitors a year with various travel experts.

ECONOMIC INDICATORS

Initial Claims: The Labor Department will release its weekly claims for first-time jobless benefits.

WHAT YOU MIGHT HAVE MISSED

— House holds Lerner in contempt

— GOP senator ‘skeptical’ of Obama transportation bill

— GAO finds one federal layoff from sequester

— CBO: 2014 deficit reaches $301 billion

— Two Banking panel members urge vote on Ex-Im Bank

— White House pulls Russia from trade benefits program

— House Dem: Lerner vote same as McCarthyism

— Foxx: State payments will be delayed without highway bill

— DOT chief: Highway fund bankruptcy would cost 700,000 jobs