Congressional “Lame Duck” Session Productive in Passing SEMI Public Policy Priorities
With the new Congress set to start on January 5, 2011, Congress used the last few days of the 111th Congress to pass multiple pieces of “must-pass” legislation, handing the semiconductor industry some big wins in the waning moments of 2010. The so-called “lame duck” session (because many sitting members have retired or been voted out of office for next year) is more productive than most experts believed would be possible following the historic losses handed to the current Democratic majorities from the November 2 mid-term elections.
The largest piece of legislation to pass is the $859 billion Obama Tax compromise. The compromise extends the 2001 and 2003 Bush tax cuts to all Americans for two years, including those for top earners. The deal also includes a payroll tax cut for workers in 2011 that trims workers payroll tax contributions by 2 percentage points. Under the agreement, jobless benefits are extended for an additional 13 months.
In addition to these large tax policies, the compromise also contains a two year extension of the R&D tax credit, one of our top policy priorities. Because the R&D tax credit expired at the end of 2009, the credit will now be retroactive to January 1, 2010 and will run through December 31, 2011. This bill represents the 14th time that the Credit was renewed since originally enacted into law in 1981.
Also included in the tax bill is another big win for SEMI’s policy priorities — the extension of the Sec. 1603 Treasury Grant Program that allows alternative energy projects, such as solar PV, to claim the 30 percent investment tax credit (ITC) as a grant. The one-year extension of this program will allow many solar projects to be funded that otherwise would not have the necessary upfront financing to get started, ensuring continued support for the Solar PV industry.
After stalling in the Senate after passing through the House of Representatives in the Spring, the Senate was finally able to approve a reauthorization of the America COMPETES Act, which authorizes funding for innovation initiatives in the U.S., including funding for basics science research and Science, Technology, Engineering, Math (STEM) education. While the compromise version of this bill is not as robust as the original House-passed version, it is still a valuable tool in promoting these important areas in the American economy. The bill authorizes nearly $17 billion for basic research over three fiscal years within the Department of Energy's Office of Science, and $918 million over three years for the Advanced Research Projects Agency—Energy.
Unfortunately, the National Nanotechnology Initiative established in 2003 was not included in the final version of the bill. This legislation passed the House for a second time on December 21, sending it to President Obama for his signature.
Some legislation has failed to advance in the lame duck session. Perhaps most notably is the failure of the Senate to consider the DREAM act, an immigration bill to provide green cards to those who are brought to the U.S. illegally as children if they complete college or serve in the military. In addition, Congress continues to ignore the needs of American industry by failing to address comprehensive immigration reform, including high-skilled immigration processes and procedures. It is our hope that the needs of highly skilled workers and industry will be addressed in the next Congress.
The final piece of work that needs to be done before the 111th Congress can adjourn is to fund the government for the next fiscal year. Having failed to pass the normal appropriations funding for Fiscal Year 2011, Congress is now operating under a continuing resolution which flat funds the government until March 2011. This sets up the first real fight for the next Congress as budget issues and spending will be at the forefront for the first few months of 2011. In addition to funding the government, the new Congress will have to consider raising the debt limit for the U.S. Treasury, which will pit many of the new Members of Congress who came into office with promises of fiscal austerity versus the need to continue to fund the basic functions of the federal government.
The SEMI Washington, D.C. office will address critical issues as this Congress sunsets and the new Congress begins. If you have any questions about U.S. public policy, please contact the SEMI DC office at 202-289-0440 or by e-mail at email@example.com.
January 6, 2011