White House to push forward on H-1Bs, R&D credit

U.S. President George Bush's administration will continue to push for a permanent R&D (research and development) tax credit and an increase in H-1B immigrant worker visas, even though both efforts have hit roadblocks recently.

The U.S. Congress is likely to include a one-year extension in an R&D tax credit later this year, John Marburger, director of the White House Office of Science and Technology Policy, said Friday. Bush, Marburger's boss, called for a permanent extension of the tax credit as part of his American Competitiveness Initiative (ACI) announced in January.

Tech vendors and trade groups such as the Information Technology Industry Council have called on Congress to make the tax credit permanent. Congress has temporarily extended the R&D tax credit several times since 1981, but lawmakers have been reluctant to make the tax credit permanent partly because of its cost -- US$7 billion or more a year.

The credit allows U.S. companies to get a tax break of up to 10 percent of R&D spending. A one-year extension to the tax credit is likely to be included in a tax bill later this year, but the White House will push next year for a permanent extension, Marburger said during a press briefing.

"We are not giving up on extending the tax credit," Marburger added. "It certainly doesn't make sense to do this one year at a time."

On the controversial H-1B visa program, Marburger said the White House will continue to push for an increase in the yearly cap as part of a comprehensive immigration reform package. In May, the Senate passed an immigration bill that would increase the annual H-1B cap from 65,000 to 115,000.

But many Republicans in the House of Representatives have said they don't support the Senate bill because its too soft on illegal immigration. The Senate bill amounts to an "amnesty" program for illegal immigrants, many House Republicans have said.

Many large tech vendors, including Microsoft Corp., have called for increases in the H-1B cap, saying they need to attract the smartest technology workers in the world in order to compete in a global economy. But groups representing tech workers have opposed increases in the H-1B cap, saying the program takes jobs from U.S. tech workers.

This month, the Programmers Guild said it was in the process of filing about 380 complaints over H-1B hiring abuses to the U.S. Department of Justice.

Bush will continue to push for Congress to pass a wide-ranging immigration plan, Marburger said. "The president believes it's important to have a comprehensive bill," he said. "[H-1Bs] will be part of it."

IDG News Service

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