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Senate OKs Hatch bill, but it faces Clinton veto

SHARE Senate OKs Hatch bill, but it faces Clinton veto

WASHINGTON — Legislation that would make permanent what has been a temporary tax credit for businesses doing research and experimentation passed the Senate 98-1 on Thursday. However, the proposal brought by Sen. Orrin Hatch, R-Utah, has a problem. It is attached to a bill that President Clinton has vowed to veto.

Hatch added his legislation as an amendment to a bill to end "estate taxes," which Republicans prefer to call death taxes. Clinton says ending them would cost too much and help only the rich. Republicans say it would help many middle-class families keep small businesses and farms.

In proposing that the research/experimentation tax credit become permanent, Hatch is attempting to relieve businesses of the guesswork involved in planning research and experimentation. Congress has made short-term extensions of the research tax credit 10 times in the past 19 years. That's made businesses uncertain about whether they can afford some types of research, so it is time to make such research credits permanent, he said.

"Research and development projects typically take a number of years and may even last longer than a decade," Hatch said. "As our business leaders plan these projects, they need to know whether or not they can count on this tax credit."

Democrats who are normally foes of Hatch on most issues, praised the Utahn's amendment. Sens. Daniel Patrick Moynihan, D-N.Y., Edward

Kennedy, D-Mass., and Max Baucus, D-Mont., all spoke in favor of it.

But Baucus lamented, "The unfortunate part is that it is on a bill that the president says he's going to veto. But I hope we can find a vehicle . . . that will work" for the proposal.

E-MAIL: lee@desnews.com