House Republicans Assert That They Are The High Tech Party

September 17, 2003. The House Republican High-Tech Working Group (HTWG) hosted an event in the Capitol Building to review its accomplishments, promote its agenda, and assert that when it comes to technology, the Republicans "get it".

Rep. Bob Goodlatte (R-VA), the Chairman of the HTWG, presided. The other Members of Congress who attended were House Speaker Denny Hastert (R-IL), Rep. Chris Cox (R-CA), Rep. Sherwood Boehlert (R-NY), Rep. Tom Davis (R-VA), Rep. John Doolittle (R-CA), Rep. David Dreier (R-CA), Rep. Adam Putnam (R-FL), Rep. Lamar Smith (R-TX), Rep. Fred Upton (R-MI), and Rep. Jerry Weller (R-IL).

Rep. Goodlatte stated that "Republicans have been working hard to benefit the high tech community" and "Republicans get it when it comes to high tech." He added that "we are the party with a record of achievement".

House Speaker Hastert (at right) spoke philosophically about how less government regulation and lower taxes are good for the economy and good for high tech.

He referenced the success of high tech companies around the country. He stated that "It happens because we haven't regulated it. It happens because we have given people the impetus. What we have also tried to do, in basic policy, is to create a tax policy that doesn't hinder -- and create capital. In the last three tax reforms that we have passed, in 2001, 2002, and 2003 have basically done three things": first, "open up ability for people to invest capital"; second, "making that capital freer, to give less taxation on dividends and less taxation on capital gains, ..."; and third, "for the people who buy these new high tech things, put money in consumers' pockets".

Rep. Boehlert, the Chairman of the House Science Committee, touted the Cybersecurity Research and Development Act, which became law last year, and the nanotechnology initiative, which passed the House. Both received wide bipartisan support in both the Science Committee and the full House.

Moreover, on most technology related issues, the House Science Committee builds bipartisan, and often unanimous, support for its initiatives. Although, the Appropriations Committee does not always fund what the Science Committee authorizes.

Rep. Cox is now the Chairman of the House Homeland Security Committee. However, he spoke about an issue that he has worked on since the 105th Congress -- internet taxes. The two leading proponents of the original Internet Tax Freedom Act passed in 1998, its extension in the last Congress, as well as the pending versions of the Internet Nondiscrimination Act, are Rep. Cox and Sen. Ron Wyden (D-OR).

Rep. Cox said that "although I credit Republican leadership for this, it has been bipartisan effort to bring the Internet Tax Freedom Act forward all of these years, and as we saw today on the House floor, it is still bipartisan."

Rep. Upton, the Chairman of the House Commerce Committee's Subcommittee on Telecommunications and the Internet, boasted about the passage of legislation enabling the creation of a second level domain within the .us country domain for material that is appropriate for children -- the dot kids bill.

This bill was moved with support from Rep. John Shimkus (R-IL), and Rep. Ed Markey (D-MA), the ranking Democrat on the Telecom Subcommittee. It passed the Committee and the full House with bipartisan support.

Rep. Dreier, the Chairman of the House Rules Committee, bragged that "I am regularly criticized for being in the hip pocket of the American technology sector", citing a USA Today article on stock options.

He advocated "the continuation of broad based stock options". Rep. Dreier stated that "I happen to believe that as we look at the attempts that have been made by some to impose mandatory expensing, as far I am concerned, it is fine to have expensing for executives. I really don't care about executives at all. I don't care about high top level management at all. You know why? Because there they are strong enough that they can fend for themselves. But I am concerned about are those rank and file employees who are out there creating these marvelous new ideas. You know, none of them ever come from the top, these marvelous new ideas that come from the grassroots within so many companies. We need to make sure that broad based stock options plans are still available for those people who are able to make ends meet and do things because of the fact that they have them. As we talk to those decision makers at the top, we know that the imposition of mandatory expensing will force many companies to bring about an elimination of broad based stock option plans."

Rep. Dreier added that "we have bipartisan legislation that we are pursuing." Rep. Anna Eshoo (D-CA), who represents a Silicon Valley district, like Rep. Dreier, is vocal on this issue. See for example, HR 1372, the "Broad-Based Stock Option Plan Transparency Act", sponsored by Rep. Dreier and Rep. Eshoo.

Rep. Lamar Smith, the Chairman of the House Judiciary Committee's Subcommittee on Courts, the Internet and Intellectual Property, stated that "the high tech sector has accounted for two thirds of America's increase in productivity since 1995". Hence, "if we are going to have a healthy economy, we have to have a healthy high tech sector".

He stated that there is "the need to enforce patent and copyright law. Unfortunately, there are a lot of crimes in the country today that are trending down, there are other crimes that are growing exponentially, and they are intellectual property crimes. And, I am speaking particularly about digital piracy." He said that "we need to address that by enforcing the copyright laws".

He also addressed cyber security, and stated that it is on the agenda for the Republican HTWG.

Rep. Weller, who is a member of the House Ways and Means Committee, addressed tax issues. He stressed the "Jobs and Growth Tax Relief Reconciliation Act of 2003" which became law in May, which has an increased bonus depreciation of 50%.

He added that, "working with the technology sector, we House Republicans have worked to bring about change in how we depreciate assets, how we provide for cost recovery, when business invests in a new asset, whether a computer, or telecommunications or security equipment, for their business or workplace". He commented that, "if you recognize the real life of an asset, the fact that a computer is depreciated over five years, and business replaces it every fourteen months, it doesn't make sense to depreciate it over five years. Well, as a result of that, we worked to put the bonus depreciation in the Jobs and Growth Tax Relief Reconciliation Act of 2003, which gives business an incentive essentially to replace their equipment. And the reason they have that incentive is they get 50% plus the normal depreciation ... And, of course, for the first $100,000 that a business invests in technology, they can fully expense it."

Rep. Weller also addressed trade, which falls within the jurisdiction of the Ways and Means Committee. He stated that "you are not pro high tech unless you are pro free trade". Legislation giving the President trade promotion authority passed in the last Congress on a largely party line vote. However, some Democrats, such as Rep. Cal Dooley (D-CA), provided key support, while some Republicans, such as Rep. Putnam, voted against the bill.

Rep. Weller stated that trade promotion authority made possible the free trade agreements with Singapore and Chile, which in turn, contain tough standards pertaining to intellectual property rights.

None of the participants at the event said anything about making the research and development tax credit permanent, a proposal with wide support from technology companies and the groups that represent them.

The speakers also addressed a number of other issues where there are partisan differences.

Rep. Goodlatte addressed the Class Action Fairness Act, which passed the House in June. He said that "this legislation will reign in frivolous class action lawsuits that threaten the high tech community".

The House passed HR 1115 on June 12, 2003 by a vote of 253-170. This was a largely party line vote, although 32 Democrats joined Republicans in voting for the bill. See, Roll Call No. 272. See also, stories titled "Reps. Goodlatte and Boucher Re-Introduce Class Action Fairness Act" in TLJ Daily E-Mail Alert No. 619, March 10, 2003, and "House Passes Class Action Fairness Act" in TLJ Daily E-Mail Alert No. 680, June 13, 2003.

Rep. Davis, the Chairman of House Government Reform Committee, discussed the Services Acquisition Reform Act.

He said that "If you want to be innovative in government, you need to look to the private sector, where we sort, sort of, the best innovative technological things that are going on. And the way we do that, of course, is by buying goods and services. And, we just recently passed in the House the Services Acquisition Reform Act, as part of the Defense Authorization Bill. It passed through our committee on a party line vote. The opposition was based on not wanting to make outsourcing easier -- trying to protect government jobs. But we are talking here about technology fields where the government does not have the in house expertise. We want to harness a lot of the innovation and technical expertise out in the private sector."

He added that "that is another innovation that comes from our party this year in the Congress, and we expect it to be made part of the full Defense Authorization Act."

TLJ spoke with Rep. Goodlatte after the event about the bipartisan support for much of the legislation discussed at this event. Goodlatte made several points.

First, he stated that on a number of issues, while Democrats have provided key support, such as Rep. Rick Boucher's (D-VA) support for class action reform legislation, most Republicans have supported the legislation, while most Democrats have opposed it.

Other examples would include Y2K legislation in the 106th Congress, and passage of legislation giving the President trade promotion authority in the 107th Congress.

Goodlatte also made the point that there is a wide divergence between the House Republican leadership and the House Democratic leadership in support for high tech. He added that if the Democrats had been in the majority, a number of technology related bills would not have been brought to the floor.

The Republican HTWG was formed by former Speaker Newt Gingrich (R-GA) in 1996. Rep. Goodlatte stated that the group "provides a line of communication between the industry and the Congressional leadership."

Phil Bond, Under Secretary of Commerce for Technology, attended the event and spoke briefly. He praised the Republican HTWG. See also, TA release.