Rep. Rep. Kevin Brady sponsored the American Research and Competitiveness Act, passed by the House on May 9, 2014. (UPI Photo/Kevin Dietsch) | License Photo
WASHINGTON, May 9 (UPI) -- Defying a veto threat from the president, the House passed a bill Friday morning to make permanent a tax credit meant to give American businesses an edge by boosting research funding.
The Republican-backed measure is an extension of the Research and Experimentation Credit, first implemented in 1981, which has expired eight times and extended 14. The current tax credit expired on Dec. 31, 2013.
"With the American economy sputtering along, this bill creates an opportunity that we simply cannot afford to pass up," said Majority Leader Eric Cantor, R-Va., ahead of the vote on the House floor Thursday, which passed 274-131.
"This has been a provision that has expired over and over again over the last 30 years." Cantor added, "This is one of the most generative things we can do from a policy standpoint that has been confirmed by independent economic analysis, to grow jobs and to have America work again for more people."
While extending the tax credit was supported by both parties, Democrats said the current extension, which does not offset the tax credit elsewhere, did the "right thing in the wrong way."
In a statement from the White House, the administration cited analysis from the Office of Management and Budget that found the current legislation would add $156 billion to the federal deficit over the next 10 years.
"The deficit increase in H.R. 4438 is more than 15 times the cost of the proposed extension of emergency unemployment benefits, which Republicans are insisting be offset, and more than double the discretionary funding increases for defense and non-defense priorities such as research and development in the Bipartisan Budget Act of 2013, which were offset," the statement said. "House Republicans also are making clear their priorities by rushing to make business tax cuts permanent without offsets even as the House Republican budget resolution calls for raising taxes on 25 million working families and students by letting important improvements to the Earned Income Tax Credit, Child Tax Credit, and education tax credits expire."
The administration did suggest it would support a version of the R&D tax credit extension, with offsets such as closing tax loopholes.