House passes research and development tax credit
© Greg Nash

The House voted Wednesday to permanently restore and expand the tax credit for business research, one of the most popular of the dozens of temporary tax breaks that Congress routinely revives on a short-term basis.

In the 274-145 vote, 37 Democrats joined all but one Republican in voting to put the research credit, which Congress has been extending on a stop-and-go basis for almost 35 years, into place for good. Rep. Walter Jones (R-N.C.) was the only GOP lawmaker to vote against the measure.

Supporters of the proposal from Rep. Kevin BradyKevin Patrick BradyDemocratic retirements could make a tough midterm year even worse Yellen confident of minimum global corporate tax passage in Congress 136 countries agree to deal on global minimum tax MORE (R-Texas), which included major business advocates, said the measure would give companies necessary assurances that the research credit wasn’t going anywhere.


"This is something that we think ought to be a permanent feature of our tax code," said House Ways and Means Committee Chairman Paul RyanPaul Davis RyanJuan Williams: Pelosi shows her power Cheney takes shot at Trump: 'I like Republican presidents who win re-election' Cheney allies flock to her defense against Trump challenge MORE (R-Wis.).

Even many of the Democrats who voted against Wednesday’s measure back the research credit and previously signed on to legislation that would permanently extend the tax break.

But President Obama, who threatened to veto the House bill, and congressional Democrats complained that Republicans were being fiscally irresponsible in not offsetting the cost of extending the tax break – more than $180 billion over a decade, according to the Joint Committee on Taxation.

"It ain't free. We've got to pay for it. So it's not an issue of not supporting research and development. It's wanting to be responsible. And be honest with the American people and say, 'Let's pay for it,' " said House Democratic Caucus Chairman Xavier BecerraXavier BecerraFDA proposes rule to offer over-the-counter hearing aids Overnight Health Care — Presented by the National Council for Mental Wellbeing — FDA panel endorses booster shots of Johnson & Johnson vaccine Biden administration to invest 0 million to boost health care, attract workers MORE (D-Calif.).

In its veto threat, the White House accused the GOP of "imposing a double standard by adding to the deficit to continue and expand costly tax breaks, while slashing investments and programs that serve middle-class and working Americans in the name of fiscal rectitude."

Wednesday’s vote marked the second time in a little over a year that the House voted to expand and permanently the incentive for corporate research. In May 2014, more than five dozen Democrats joined all but one Republican in backing a permanent research credit.

But just like last year, the chances for a more long-term incentive for research are unsettled, as Washington again grasps for an agreement to bring back the dozens of expired tax breaks commonly known as extenders.

Last December, Congress ended up restoring the research credit and more than 50 other tax breaks that expired at the end of 2013 for a year — essentially extending the tax preferences for less than three weeks. Lawmakers turned to the one-year deal after negotiations over a broader agreement that would have permanently extended the research credit fell apart.

Ryan has said that he hopes to find a more permanent solution for many of the extenders as part of a "down payment" on tax reform. The House has already voted this year to permanently extend a provision allowing small businesses to more quickly write off investments, and incentives for charitable giving.

Sen. John ThuneJohn Randolph ThuneSenate Republicans raise concerns about TSA cyber directives for rail, aviation Democrats narrow scope of IRS proposal amid GOP attacks Senate GOP signals they'll help bail out Biden's Fed chair MORE (R-S.D.) has floated the idea of pairing the expiring tax breaks with a new highway deal, with Congress expected this week to set a new deadline of July 31 for spending on roads.

But while most congressional leaders and tax writers don’t want to push a decision off on tax extenders until the end of the year, many lawmakers say they won’t be surprised if another last-minute deal is needed.