President Barack Obama this week will urge Congress to permanently extend and expand a research and development tax credit to encourage job growth.
Obama will lay out the proposal, which would cost about $100 billion over the next decade, in a September 8 speech on the economy in Cleveland, Ohio, according to two administration officials speaking on condition of anonymity before the announcement.
Obama has promised to roll out “new ideas” to boost growth and spur hiring as he focuses on the economy with less than two months until the November congressional elections.
The Labor Department reported last week that private payrolls climbed 67,000 in August, more than forecast, though the unemployment rate rose to 9.6 per cent from 9.5 per cent as more people looked for work.
Every president since Bill Clinton has backed a permanent extension of the research and development tax credit, which Congress only temporarily extends because of its high cost.
“The business community is on board for the R-and-D tax credit,” said Mark Zandi, chief economist at Moody’s Analytics, on the CBS “Face the Nation” program. Still, he said Obama will “have to take some of the corporate tax benefits away to pay for it.”
Laura D’Andrea Tyson, an economics professor at the University of California member of Obama’s Economic Recovery Advisory Board, said on CBS the research tax credit is “very important in terms of job creation over the longer term.” She also suggested a suspension of the payroll tax for businesses that hire new workers would have a more immediate impact.