Washington Update: Congress Leaves Unfinished Business before November Elections
With the Presidential and Congressional elections dominating the news cycles and the business of the federal government, Members of Congress have officially turned off the lights in the Capitol Building to head back to their states and districts to concentrate on the business of the 2012 elections. While there are still matters for Congress to complete before the official end of the 112th Congress, which ends on January 4, 2013, the most pressing issue is whether or not most of these public servants will return to serve another term for the 113th Congress. That said, the House and Senate will still have to return to Washington after the elections for a “lame duck” session in November to consider expiring tax legislation, raising the national debt limit, and whether or not to allow previously agreed to spending cuts, known as “sequestration” to take place next year. Altogether, this group of “must-pass” legislation is known as the “fiscal cliff.”
While “lame duck” sessions are historically marked by fighting over the annual spending bills to fund the government, the 112th Congress avoided this scenario in by passed a six month funding bill that keeps the government funded at FY 2012 levels, or $1.047 trillion, through March 2013. SEMI has been working to increase funding for research and development programs like the National Science Foundation (NSF), the National Institutes of Standards and Technology (NIST), and the Department of Energy (DoE) Office of Science. So while the flat funding of these programs through March runs counter to the needed increases to keep America’s innovation economy competitive, it is preferable to the cuts that some of these programs, like the DoE Office of Science, were facing in the spending bills that were under consideration by Congress to fund FY 2013. SEMI will continue to work with members of Congress to ensure that these programs that are so vital to American research and development efforts are fully funded for the remainder of FY 2013, and beyond.
Immigration reform is a heated topic that is often talked about, but rarely addressed in an election year because of the sensitive and deeply held convictions that are present on both sides of the debate. While SEMI remains neutral on the overall immigration reform debate, when it comes to high-skilled immigration reform the needs of SEMI member companies is a top priority. Too often the highly talented individuals who come to the U.S. to get advanced degrees in Science, Technology, Engineering, and Math (STEM) fields are unable to stay, work, and contribute to the American economy because of outdated and arbitrary immigration rules. That’s why SEMI signed on to a letter penned by a coalition of high-tech trade associations to every member of Congress in support of H.R. 6429, the STEM Jobs Act. This bill would eliminate the diversity lottery green card program and reallocate up to 55,000 green cards a year to new green card programs for foreign graduates of U.S. universities with advanced STEM degrees. Unfortunately, the STEM Jobs Act failed to pass the House on a vote of 257-158, because of a procedural vote that required 2/3 majority for passage. Never-the-less, SEMI will continue to work with like-minded trade associations and Members of Congress to reform our high-skilled immigration system.
With the 2001 and 2003 tax cuts set to expire at the end of the year, Congress will almost certainly be addressing the issue of taxes during the “lame duck” session. For SEMI members, the tax debate that will be most relevant in this period will be the extension and retro-active renewal of the R&D tax credit. This tax credit, which is renewed on an almost annual basis, expired on December 31, 2011. The Senate Finance Committee passed a package of business tax credits, including an extension of the R&D tax credit until December 31, 2013, but the bill was not taken up by the Senate prior to their adjournment. While it is likely that the R&D tax credit will be extended, the lack of certainty with the credit makes it difficult for SEMI members, who typically invest 10-15 percent of their annual revenues back into R&D, to count on the credit being there for planning purposes.
Outside the halls of the Capitol Building, the U.S. government is involved in high-level talks to expand high-tech trade. On September 24, U.S. negotiators joined officials from 69 other nations in Geneva to begin technical discussions on the expansion of the Information Technology Agreement (ITA). Originally agreed to in 1996, the ITA eliminates tariffs on a specific list of technology-related goods and now accounts for about 97 percent of information technology products. As negotiators work to construct the list of products to be granted ITA coverage, U.S. officials will utilize information SEMI developed over the past few months with the help of its members. By providing government officials with detailed information on all semiconductor-related items, the aim is to expedite the negotiations process and clearly demonstrate the worthiness of SEMI’s proposed products. SEMI will continue to actively support the process for expanding the ITA as it remains a top priority for many SEMI members.
Much work remains in Washington after the highly anticipated November elections, and into the beginning of either a new administration or a second term for President Obama. SEMI will continue to work with both parties to advance the policy priorities of the micro-electronics industry. If you have any questions regarding U.S. public policy or would like to know how you can be more involved, please contact Jamie Girard, sr. director, North America Public Policy, at email@example.com.
October 2, 2012