Obama Signs Tax Bill

President Barack Obama has signed into law a bipartisan agreement to extend Bush-era tax cuts through 2012 and continue a series of business tax breaks, including a credit designed to encourage investment in research and development.

"It's a good deal for the American people. This is progress and that's what they sent us here to achieve," Obama remarked at a White House ceremony on Dec. 17. The bill, he said, "will protect our middle class, grow our economy, and create jobs."

The $858 billion package (H.R. 4853) includes a number of items that business groups have been lobbying for, such as a retroactive two-year extension of the 20% tax credit for R&D expenditures, which lapsed at the end of 2009. The tax bill also includes a one-year extension of a renewable energy grant program and tax credits for domestic ethanol production and energy efficiency projects.

The bill was passed just before midnight Dec. 16 in a rare show of bipartisanship in the House of Representatives. The vote was 277 to 148, with each party contributing an almost identical number of votes in favor—the Democrats 139 and the Republicans 138. The Senate easily cleared the measure a day earlier by a vote of 81 to 19 (C&EN, Dec. 20, page 7).

"Manufacturers are pleased the House put the economy first and passed this critical tax relief with no amendments," says Jay Timmons, executive vice president of the National Association of Manufacturers, the nation's largest industrial trade group. "These much-needed incentives will spur investment, economic growth, and job creation."