Seeking ways to spur economic growth ahead of the November elections, President Barack Obama will ask Congress to increase and permanently extend research and development tax credits for businesses, a White House official said Sunday.
Obama will outline the $100 billion proposal during a speech on the economy Wednesday in Cleveland, the official said. The announcement is expected to be the first in a series of new measures Obama will propose this fall as the administration looks to jump-start an economy that the president himself has said isn't growing fast enough.
In addition to making the research credits permanent, Obama will also ask Congress to extend one of the credit options available to businesses from 14 to 17 percent, according to the official, who spoke on the condition of anonymity because the proposal has not been formally announced.
Congress has previously passed research tax credits on a temporary basis. The credits expired last year and a proposal for renewal is pending in the Senate. In order to pay for a permanent extension, Obama will ask Congress to close corporate tax breaks for multinational corporations and oil and gas companies.
While research credits generally have bipartisan support, Washington's contentious political atmosphere means the White House isn't taking anything for granted. Officials have watched other proposals they deem necessary to economic growth, including a bill to extend credit and cut taxes for small businesses, languish on Capitol Hill.
The proposal for research and development tax credits was first reported by The New York Times.
Amid an uptick in the jobless rate to 9.6 percent, the president promised to announce a series of new measures on the economy. The package could include infrastructure bonds for municipalities and extensions for other tax breaks for businesses and individuals that expired at the end of 2009.
The administration is also considering extending a law passed in March that exempts companies that hire unemployed workers from paying Social Security taxes on those workers through December. Sen. Chuck Schumer, D-N.Y., has proposed extending the exemption an additional six months.
Obama is continuing to prod the Senate to pass the small business bill that calls for about $12 billion in tax breaks and a $30 billion fund to help unfreeze lending. Republicans have likened the bill to the unpopular bailout of the financial industry. And the president wants to make permanent the portion of George W. Bush's tax cuts affecting the middle class.
The House has already passed many of the provisions, but they have stalled in the Senate because Republicans and Democrats cannot agree on how to pay for them.