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Tech asks departing Republicans for favors

Tech lobbyists are mounting a last-minute campaign to press the waning days of a Republican Congress for action.

As Republican politicians return this week to Washington for the waning days of their rule of Capitol Hill, technology lobbyists are frantically pressing for last-minute legislation before Democrats take over next year.

At issue are proposals including renewing a popular tax credit for research and development expenses and expanding the number of H1-B visas, which are temporary visas designed for skilled foreign workers. Many spending bills to fund the federal government through the next year have yet to be considered, and the final versions could include antipiracy measures and Web censorship requirements.

The R&D tax credit expired on the last day of 2005, a phenomenon that is "leaving big and small companies in the lurch," said Phil Bond, president of the Information Technology Association of America. Bond hopes that Congress will extend the tax benefit in an appropriations bill before politicians leave town for the holidays.

Some of the proposals like the R&D tax credit and H1-B visas are, at least in theory, supported by both major political parties. But Washington representatives of tech companies fret about additional delays--and the incoming Democratic leaders have stressed that they will be occupied with other topics like the Iraq war and increasing the minimum wage after they assume control.

Which explains the frenzy of press events designed to coincide with a lame-duck Congress. On Monday, more than 200 companies, universities and organizations circulated a letter supporting further action on a Senate proposal to boost the quota for H1-B visas, which proponents argue are necessary to fill gaps in their operations where qualified Americans aren't available. They said the need for action sooner than later is especially urgent because U.S. companies exceeded the H-1B quota for the next fiscal year scarcely two months after the application window opened.

On Tuesday, executives of the Information Technology Industry Association, American Electronics Association, Electronic Industries Alliance, TechNet and ITAA are scheduled to hold a press conference urging Congress to make the R&D tax credit a permanent legislative fixture.

If history is any indication, congressional lame-duck sessions can result in an impasse, particularly when power shifts are imminent. Politicians from the incoming majority party have a strong incentive to block legislation they don't care for, and political disputes often flare up. If spending bills are unfinished, that leaves the fallback approach: passing a "continuing resolution," which keeps the federal government operating for a few more weeks and postpones debate until the new Congress convenes in January.

For instance, after the 1994 elections, when Republicans gained their first House majority in 40 years and also took control of the Senate, the lame-duck session lasted only four days and involved passage of just one bill, which was related to tariffs and trade, according to a 2003 Congressional Research Service report (click for PDF). In 1954, when Democrats took control of the House, the chamber didn't even reconvene after adjourning at the end of August.

Another open question is how long the current lame-duck Congress will stay in town before adjourning permanently. Congress has passed only two of its 13 spending bills for the next fiscal year. The Republican leadership's priorities will lie in approving as many of the remaining measures as possible--which doesn't include much room for a tax credit or H1-B reform--a Senate majority aide said.

The Senate plans to be in session this week, adjourn for the last two weeks of November, and return on December 4 for an indefinite time period, but its precise agenda during that time has not been set, the aide said. An aide to the House Republican leadership said he had only a hazy idea of what the schedule would be and could not provide a detailed outline.

A post-election wish list
Despite those lingering uncertainties, some lobbyists for high-tech companies and the broader business community said they're confident that this Congress will act on their post-election wish list.

"We think that's completely doable, and there's no lack of a majority will to do that," ITAA's Bond said in a telephone interview, referring to renewing the R&D tax credit.

There's little dispute that extending the R&D tax credit, designed to encourage companies to experiment with new technologies, enjoys bipartisan support. President Bush called for its permanence in . Congressional Democrats made the concept a key tenet of the "innovation agenda" they laid out last year. Industry lobbying groups say passage this year has stalled because of unrelated conflicts about provisions in the proposed tax law that also includes the R&D tax credit extension.

The response from Capitol Hill, however, has been noncommittal. An aide to the Senate Democratic leadership said Monday that Minority Leader Harry Reid "strongly supports passage of the R&D tax credit" but could not comment further on a timeline. An aide on the Republican side, however, was less optimistic about the possibility of action before the end of the year, characterizing that prospect as "unlikely." A House Democratic staffer said his chamber was similarly in wait-and-see mode.

Another urgent priority touted by business lobbyists, both inside and outside the technology sector, is securing passage of legislation that would elevate the number of visas, known as H-1Bs, and green cards for skilled foreign workers.

It was during a lame-duck session after the 2004 election that Congress last agreed to a number of changes in the visa program. As part of a catch-all spending bill, the politicians decided to grant 20,000 additional visas to foreigners who earn a master's degree or higher from a U.S. institution.

"We have widespread support for the provisions we're pushing, but they've been caught up in the broader immigration debate this year."
--Lynn Shotwell, chairwoman of Compete America

Earlier this year, the Senate voted to raise the cap to 115,000 as part of a sweeping immigration bill. (The government's baseline H-1B quota has remained at 65,000 since 2004, after peaking at 195,000 between 2001 and 2003.) The measure also contains a provision stipulating that if that cap is reached in a certain year, then it can be raised by 20 percent for the next year. But the House has yet to reconcile that bill with its own competing immigration proposal, which appears to contain no H-1B provisions.

"We have widespread support for the provisions we're pushing, but they've been caught up in the broader immigration debate this year," said Lynn Shotwell, chairwoman of Compete America, which sent Monday's letter with more than 200 signatures. The group markets its platform as ensuring that "U.S. employers have the ability to hire and retain the world's best talent."

Organizations that represent American technology workers, such as the Programmers Guild, have opposed that approach, saying there would be no need for additional visas if stronger safeguards were in place to prevent their abuse. They voiced support for a competing version of legislation, sponsored by Rep. Bill Pascrell (D-N.J.), which did not advance in Congress and thus stands virtually no chance of passage during the lame-duck session.

"If there was a labor shortage, as proponents allege, then the 'best and brightest' tech workers being laid off by Intel, HP and dozens of other companies would be snapped up," Programmers Guild wrote in a message that it encouraged supporters to e-mail to their local representatives. "Instead, many are unable to find work. Many U.S. IT workers with degrees and several years of experience cannot find full-time work either."

Beyond work on the R&D tax credit, the Republican Congress likely won't accomplish much else of note to the technology industry, some lobbyists said. For instance, few expected movement on a massive telecommunications bill that passed a Senate committee in June without Net neutrality provisions sought by Internet companies like Google and eBay.

And despite President Bush's recent renewed calls for the Senate to approve a controversial bill that would expand the government's ability to monitor e-mail and telephone communications without a warrant, even Republican aides acknowledged that bill's fate remains up in the air. (The House managed to pass a Republican-backed companion bill, mostly along party lines, just before the chambers adjourned for pre-election campaigning.)

On Capitol Hill, an early Christmas tree
"Issues like telecom, surveillance, copyright and patents are too controversial, too intricate or both for such a short session," said Will Rodger, public policy director for the Computer and Communications Industry Association, whose members include Google, Oracle and Sun Microsystems. "Congress, in the meantime, has a slew of appropriations bills to pass, and those could take up all the time they have left."

There's always the possibility that politicians could sneak seemingly unrelated provisions into those appropriations bills. The practice has become so widespread that it even has an official name: a "Christmas tree bill."

A pending measure that lays out budgets for the U.S. departments of justice and commerce, for instance, also contains a controversial proposal that operators of "sexually explicit" sites label each page they put online as such.

Gary Shapiro, president of the Consumer Electronics Association, recently said he had reason to fear that Tennessean Senate Majority Leader Bill Frist, who is retiring, might try to slip a proposal for a so-called "broadcast flag" into a spending bill. Such a law is designed to curb digital TV piracy by making certain receivers illegal to sell.

The ITAA's Bond said his organization would be similarly vigilant to back-door attempts at pushing through questionable policies. "We'll need to make sure that if somebody tries to slip something in there," he said, "it represents the best and balanced (approach)."

CNET's Declan McCullagh contributed to this report.