Business leaders disappointed that $31B in tax extenders are out of jobs bill

A number of high-profile business associations are disappointed by Senate Majority Leader Harry Reid’s (D-Nev.) decision to narrow the jobs bill.

The Business Roundtable, which represents the nation’s top CEOs, and the National Association of Manufacturers are among those trade groups that had pushed for the $31 billion in tax extenders that Senate Finance Committee Chairman Max Baucus (D-Mont.) had included in his bipartisan bill.

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Reid announced Thursday he would nix Baucus’s $85 billion proposal in favor of a more targeted, $15 billion bill that is not expected to include the tax extenders.

The tax credits — especially an incentive for companies to spend on research and development — are a favorite of the business community, which has been lobbying hard to see them renewed since they expired last year. Now, many of the K Street associations pleased by the Baucus bill are now scrambling for renewal of the tax extenders again.

“Yes, it is very disappointing. But the more important thing was we were surprised. What happened?” said Monica McGuire, senior policy director for taxation at the National Association of Manufacturers.

Others expressed similar dissatisfaction with the move by Reid.

“Removing the tax extenders from this package is going to increase more uncertainty by business to invest and create jobs. This development really flies in the face of the very goals the Senate is trying to address,” said Ralph Hellmann, senior vice president for the Information Technology Industry Council.

Reid backed away from the Baucus bill Thursday because of complaints about it from members of his own conference. That might have lost him some bipartisan support for the legislation. Republicans were beginning to warm to the Baucus bill, which is co-sponsored by Sen. Chuck Grassley (R-Iowa), the Finance Committee’s ranking member.

In the face of Reid’s decision, business lobbyists said they would press lawmakers to attach the tax extenders to other must-pass bills that are expected to move relatively quickly, such as extensions of unemployment benefits or healthcare subsidies. Others were adamant that the extenders be added to Reid’s proposal.

Business associations are especially fired up for a tax credit that encourages companies to spend money and hire workers in the research and development field. Known as the R&D tax credit, lobbyists have pushed for its renewal since December as the jobs bill debate began to take shape.

McGuire, as executive secretary to the R&D Credit Coalition, helped coordinate a Dec. 8, 2009 letter to all lawmakers pushing them to renew the incentive. It included more than 5,300 signatures from workers employed by industries that benefit from the credit.

“The R&D tax credit is a jobs credit,” McGuire said. “If Congress is really serious about saving and creating jobs, the first thing it could do is renew the R&D tax credit and the other tax extenders.”

Others will join in on the lobbying effort.

“The extenders package is a jobs creator. R&D performing companies employ over 17 million workers and more than 1 million scientists and engineers,” said Brigitte Gwyn, senior director for public policy for the Business Roundtable. “We will work hard to ensure that these provisions are restored retroactively back to the start of the year so that companies can move forward with new hiring and investments.”