As lawmakers stall climate legislation and the Biden White House refuses to cancel student debt, Amazon and tech giants are set to score billions of dollars of new government handouts being included in an economic competitiveness bill now moving through the United States Senate.
The United States Innovation and Competition Act (USICA), which has been billed as helping the United States compete with China by investing in scientific and technological development, already includes several massive corporate giveaways, including $52 billion worth of subsidies for highly profitable chip companies like Intel and $10 billion for Amazon founder Jeff Bezos’s space venture. Lawmakers previously blocked legislative language from Senator Bernie Sanders (I-VT) designed to prevent the government cash from being used to enrich shareholders through stock buybacks.
Amazon, Intel, and other big companies could soon score one more big win in the USICA legislation, with Senator Maggie Hassan (D-NH) pushing to make sure it includes a blanket corporate tax exemption for research and development (R&D) that would be worth $125 billion over the next four years.
The Senate voted overwhelmingly Wednesday evening to pass a nonbinding motion, introduced by Hassan and supported by seventeen other senators, that would instruct Senate negotiators to ensure that the USICA bill restores the R&D tax break. Ninety senators voted in favor of the provision. The final USICA legislation is expected to pass Congress later this spring.
“Recent polls suggest that Congress has a 19 percent favorability rating, and I find that shocking,” Sanders said during a brief debate on Hassan’s motion. “Clearly, if that 19 percent had any inkling as to what goes on here in the Senate, that number would be much lower.” Democratic senators Cory Booker (NJ), Ed Markey (MA), Elizabeth Warren (MA), and Republican senator Mike Lee (UT) were the only senators to join Sanders in voting against the motion.
The decades-old R&D tax break was suspended as part of the $1.9 trillion Republican tax law passed in 2017, in order to offset the enormous cost of cutting the corporate tax rate from 35 percent to 21 percent. However, the actual suspension of the tax break was delayed, so that it didn’t go into effect until this year.
Intel and Amazon are campaigning together as part of the so-called R&D Coalition, an organization of corporations and business groups, to demand lawmakers reinstate the R&D tax break, which allows companies to write off investments in research and development from their taxable income. Other coalition members include Boeing, Ford, Genentech, Lockheed Martin, Microsoft, Northrop Grumman, and Raytheon. The R&D Coalition is chaired by Intel’s chief tax officer and corporate vice president, Sharon Heck.
Hassan has also cosponsored standalone legislation with Senator Todd Young (R-IN), who supported her motion Wednesday night, to reinstate the tax exemption. Young and Hassan are both business group favorites running for reelection this year.
Hassan, one of eight Democratic senators to vote against including a $15 minimum wage in the American Rescue Plan, has received nearly $1.1 million from business PACs this election cycle, while Young has received more than $1.5 million from such groups, according to OpenSecrets,
Hassan received the “Abraham Lincoln Leadership for America Award” for frequently cosponsoring bills supported by the chamber.
“Since the start of the 116th Congress, the chamber has urged members to cosponsor certain bills and refrain from cosponsoring others,” the organization explained. “This award is based on the number of times a member took the recommended actions.”
Young received the Chamber’s “Jefferson-Hamilton Award for Bipartisanship,” based on the number of times that lawmakers cosponsored bills introduced by a member of the other party — as long as the chamber hadn’t formally opposed the proposals.
The chamber recently signed onto a letter to congressional leaders, along with dozens of other lobbying groups, demanding lawmakers “take immediate action to reverse” the R&D tax change in the 2017 GOP tax law, warning that it “will have dire consequences on future R&D spending and jobs.”
The version of Democrats’ Build Back Better social spending legislation that passed in the House included a provision to restore the R&D tax break.
Now that Build Back Better, which was vigorously opposed by business interests, has been stalled, perhaps permanently, corporate lobbyists and their allies in Congress moved to attach the tax provision to the USICA bill.
Passing the motion Wednesday won’t guarantee that the tax break gets included in the final competitiveness bill, but it very likely will be — especially since the motion passed with such strong support.
A separate motion from Sanders to require companies that receive subsidies under the USICA to stay neutral in union campaigns and refrain from buying back their own stocks failed, with only five Democrats joining Sanders in support and eighty-seven senators voting against.
Senator Sherrod Brown (D-OH) argued against the provision during a brief debate on the motion.