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White House: Obama would veto Republicans' R&D tax credit bill

U.S. President Barack Obama speaks at a Cinco de Mayo reception at the White House in Washington, May 5, 2014. REUTERS/Yuri Gripas
U.S. President Barack Obama speaks at a Cinco de Mayo reception at the White House in Washington, May 5, 2014. REUTERS/Yuri Gripas

WASHINGTON (Reuters) - President Barack Obama would veto a bill headed for a vote soon in the House of Representatives that would make the research and development tax credit a permanent feature of the tax code, the White House said on Tuesday.

Obama disapproves of the Republican-backed measure because it would add $156 billion to the federal budget deficit over 10 years, according to a White House statement.

The president wants to pay for a permanent R&D credit with new government revenue raised by eliminating unspecified tax "loopholes," the White House said.

The bill is headed for a vote by the Republican-controlled House as early as Wednesday.

Though the bill is expected to pass, Obama's veto threat could prompt Democrats to vote against the legislation, making its passage less certain, lobbyists said on Tuesday.

The R&D credit is claimed by a broad range of businesses. It is one of many temporary U.S. tax laws, known as "extenders," that are routinely renewed by Congress.

The credit has been extended 15 times since it was enacted in 1981. It technically expired at the end of 2013.

"Making traditional tax extenders permanent without offsets represents the wrong approach," the Office of Management and Budget said in a statement on the veto threat.

The House bill is expected to stall in the Democrat-controlled Senate, tax lobbyists said.

(Reporting by Patrick Temple-West; Editing by Kevin Drawbaugh and Leslie Adler)

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