November 14, 2006 4:00 AM PST

Tech asks departing Republicans for favors

As Republican politicians return this week to Washington for the waning days of their rule of Capitol Hill, technology lobbyists are frantically pressing for last-minute legislation before Democrats take over next year.

At issue are proposals including renewing a popular tax credit for research and development expenses and expanding the number of H1-B visas, which are temporary visas designed for skilled foreign workers. Many spending bills to fund the federal government through the next year have yet to be considered, and the final versions could include antipiracy measures and Web censorship requirements.

The R&D tax credit expired on the last day of 2005, a phenomenon that is "leaving big and small companies in the lurch," said Phil Bond, president of the Information Technology Association of America. Bond hopes that Congress will extend the tax benefit in an appropriations bill before politicians leave town for the holidays.

Some of the proposals like the R&D tax credit and H1-B visas are, at least in theory, supported by both major political parties. But Washington representatives of tech companies fret about additional delays--and the incoming Democratic leaders have stressed that they will be occupied with other topics like the Iraq war and increasing the minimum wage after they assume control.

Which explains the frenzy of press events designed to coincide with a lame-duck Congress. On Monday, more than 200 companies, universities and organizations circulated a letter supporting further action on a Senate proposal to boost the quota for H1-B visas, which proponents argue are necessary to fill gaps in their operations where qualified Americans aren't available. They said the need for action sooner than later is especially urgent because U.S. companies exceeded the H-1B quota for the next fiscal year scarcely two months after the application window opened.

On Tuesday, executives of the Information Technology Industry Association, American Electronics Association, Electronic Industries Alliance, TechNet and ITAA are scheduled to hold a press conference urging Congress to make the R&D tax credit a permanent legislative fixture.

If history is any indication, congressional lame-duck sessions can result in an impasse, particularly when power shifts are imminent. Politicians from the incoming majority party have a strong incentive to block legislation they don't care for, and political disputes often flare up. If spending bills are unfinished, that leaves the fallback approach: passing a "continuing resolution," which keeps the federal government operating for a few more weeks and postpones debate until the new Congress convenes in January.

For instance, after the 1994 elections, when Republicans gained their first House majority in 40 years and also took control of the Senate, the lame-duck session lasted only four days and involved passage of just one bill, which was related to tariffs and trade, according to a 2003 Congressional Research Service report (click for PDF). In 1954, when Democrats took control of the House, the chamber didn't even reconvene after adjourning at the end of August.

Another open question is how long the current lame-duck Congress will stay in town before adjourning permanently. Congress has passed only two of its 13 spending bills for the next fiscal year. The Republican leadership's priorities will lie in approving as many of the remaining measures as possible--which doesn't include much room for a tax credit or H1-B reform--a Senate majority aide said.

The Senate plans to be in session this week, adjourn for the last two weeks of November, and return on December 4 for an indefinite time period, but its precise agenda during that time has not been set, the aide said. An aide to the House Republican leadership said he had only a hazy idea of what the schedule would be and could not provide a detailed outline.

A post-election wish list
Despite those lingering uncertainties, some lobbyists for high-tech companies and the broader business community said they're confident that this Congress will act on their post-election wish list.

"We think that's completely doable, and there's no lack of a majority will to do that," ITAA's Bond said in a telephone interview, referring to renewing the R&D tax credit.

There's little dispute that extending the R&D tax credit, designed to encourage companies to experiment with new technologies, enjoys bipartisan support. President Bush called for its permanence in his most recent State of the Union address. Congressional Democrats made the concept a key tenet of the "innovation agenda" they laid out last year. Industry lobbying groups say passage this year has stalled because of unrelated conflicts about provisions in the proposed tax law that also includes the R&D tax credit extension.

CONTINUED: A noncommittal response…
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