With Republicans set to control the House in the new year, Ways and Means Republican Leader Rep. Kevin Brady (R-TX) told the hosts of CNBC’s “Squawk Box” that Congress shouldn’t lock in Democrats’ overspending, but instead should incentivize economic growth and end the labor shortage that’s worsening inflation and crushing families.
Congress shouldn’t lock in Democrats’ overspending.
“We are facing a decision on how to fund the government. We’ve been overspending by $3 trillion this session. I wouldn’t lock in that overspending for another year.
“Secondly, we’ve got some modest tax, trade and health provisions–they don’t cost a lot. But they get a big bang for the buck, especially on the tax side. These are provisions that allow businesses to take full deductions on research and development and expensing, writing off the equipment, technology–these are really critical in the supply chain crisis. And there are also some incentives on investment–they don’t cost much, they’re really important. On trade, there’s a similar sort of situation.
“We’re working to try to find some common ground with the Democrats here before we leave. It’s going a little slower than I would hope, but we have some time to pull this together.”
Allowing for a full deduction for R&D is supported by both parties – Democrats even voted recently to do so. Congress should be able to pass this pro-growth incentive in a bipartisan way.
“This is a very bipartisan issue. They just had a vote on R&D in the Senate, with 95 votes in support of it, because our goal is making America the most innovative nation on the planet.
“Republicans propose doubling the R&D credit permanently to make us more competitive and to do that innovation here in the U.S. It’s an example of the three or four key tax provisions in the lame duck that we ought to just find a way to get passed and approved.”
As the economy teeters on the verge of a recession, the Fed and the White House need to recognize the role of the worker shortage on inflation.
“Obviously inflation is driving so much of this. I think the White House and the Fed don’t understand the worker crisis we’re in, and how that’s driving higher prices–persistently for a long time.
“I think the Fed shouldn’t go wobbly. They’re far from anywhere close to fixing inflation. With the Republican majority, Congress ought to focus on how we ease the pain of that recession and clearly there’s some things we can do on the supply side I think that would be helpful.”