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White House 2006 budget proposal would boost IT spending

It also seeks a permanent R&D tax credit

By Grant Gross
February 8, 2005 12:00 PM ET

IDG News Service - President Bush's budget for the government's 2006 fiscal year includes an increase in IT spending, despite cuts elsewhere, and asks the U.S. Congress to permanently extend a research and development tax credit.
Bush's 2006 budget, which cuts back or eliminates 150 government programs because of record deficits, includes a 7% increase in government IT spending, with the 2006 request at $65.1 billion. About 55% of that IT-related spending would go toward defense and domestic security programs, but Bush's request for IT funding at the National Science Foundation (NSF) is up nearly 26%.
Bush yesterday delivered his $2.57 trillion 2006 budget to Congress, an increase from a $2.4 trillion request for 2005. The 2006 fiscal year begins Oct. 1.
Separately, Bush's science and technology budget would drop from an estimated $61.7 billion in fiscal 2005 to $60.8 billion in 2006. The science and technology budget includes programs such as space exploration, renewable energy and agricultural research, as well as technology-related research and development at the National Institute of Standards and Technology (NIST).
Spending for information security at 17 federal agencies would increase by $113 million, up more than 7%, if Congress approves Bush's budget. The Information Technology Association of America (ITAA), a trade group, praised the proposed spending plan.
"America must pick up the pace in science, math and engineering," ITAA President Harris Miller said in a statement. "Countries around the world have clearly signaled their intent to challenge U.S. leadership in technology. Our economic well-being depends on answering this challenge. In this regard, NSF activities loom larger than ever."
The Bush 2006 budget calls for a permanent R&D tax credit, first passed as a temporary tax credit in 1981 and extended multiple times. IT lobbying groups such as the ITAA have long called for a permanent extension of the credit, which allows U.S. companies conducting R&D activities to get a tax credit of as much as 10% of their R&D spending.
Bush's budget would provide $27 billion through 2010 for the tax credit, officially called the Research and Experimentation Tax Credit.
Bush's 2006 budget would eliminate a NIST program, the Advanced Technology Program, that provides funding for "high-risk, high-payoff" private-sector technology R&D, according to NIST.
The president has been trying to make major cuts in the program or eliminate it since taking office in 2001, but Democrats in Congress have fought the cuts. Some critics of the program, which included funding in the current budget for computer chip research and experimental wireless technologies, have called the program "corporate welfare."
Proponents, including 2004 Democratic presidential nominee Sen. John Kerry (D-Mass.), say

Reprinted with permission from Story copyright 2014 International Data Group. All rights reserved.
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