The U.S. House Ways and Means Committee approved $310 billion oftax breaks as Republicans defeated Democratic objections to theplan's budgetary costs.

The tax breaks, many of which benefit companies such as IntelCorp. and General Electric Co., have bipartisan support. How andwhether to offset their cost remains an area of dispute, whichprompted some Democrats to vote against bills they cosponsoredearlier this month.

The Republicans' proposal would make the tax benefits permanent,ending the lapse-and-revive cycle that has persisted for years. Thesix breaks whose extension was approved today and dozens of othersexpired Dec. 31. The move separates some of the breaks fromRepublicans' broader goal of revamping the U.S. tax code.

“We have to start somewhere,” said Ways and Means CommitteeChairman Dave Camp, a Michigan Republican. “We're starting withbills that have had bipartisan sponsors.”

Democrats argued that the Republican plan is fiscallyirresponsible, because it doesn't include offsetting spending cutsor tax increases, and unfair as Republicans maintain that the costof extending unemployment benefits should be covered.

They also complained about the uncertain fate of other taxbreaks, such as those for hiring workers from disadvantaged groupsand installing wind turbines.

“To say that Republican action today is hypocritical is aserious understatement,” said Representative Sander Levin ofMichigan, the top Democrat on the Ways and Means Committee.

Democrats didn't offer specific proposals for offsetting thecosts. In the past, they have supported higher taxes for oilcompanies and private equity managers to pay for extensions. Theprovisions have repeatedly been extended without thoserevenue-raising items attached, most recently in January 2013.

The panel voted 22-12 today to endorse the permanent extensionof the research credit, which has existed since 1981 and has neverbeen made permanent.

One Democrat, Representative Earl Blumenauer of Oregon, votedwith the Republicans. Two others — Linda Sanchez of California andJohn Larson of Connecticut — voted no, even though they cosponsoredthe bill.

GE, Citigroup

Beyond the research credit, the committee approved a proposal tomake permanent the active financing exception. That rule, supportedby GE and banks such as Citigroup Inc., lets companies defer U.S.taxation on income they earn from finance businesses outside thecountry.

Other breaks endorsed today include a rule that lets smallbusinesses write off some capital expenses and another that allowsmultinational companies to move money easily between subsidiariesoverseas.

Other than the research credit, the bills were passed onparty-line votes.

The Senate Finance Committee, controlled by Democrats, votedearlier this month to extend almost all the expired breaks through2015. That bill contained no offsetting spending cuts or taxincreases.

The bills under consideration are H.R. 4429, H.R. 4438, H.R.4453, H.R. 4454, H.R. 4457 and HR 4464.

Bloomberg News

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