Although the tax extenders are individually mostly small, put together they can add up to considerable sums. The largest of the tax expenditures due for renewal is the research and development (R&D) tax credit, which has, in fact, now been temporary for some 30 years.

The tax measures in question were last extended by the 2010 tax cut package. However, no time, or possibility, has yet been found to provide for their extension this year, particularly given the time and effort taken at the end of last year to obtain a two-month extension to the payroll tax cut.

In his introduction at the hearing, the Finance Committee Chairman Max Baucus (D - Montana) called for a “long-term, pro-jobs solution” that would end the uncertainty caused by all tax provisions requiring frequent renewal. He spoke about the need to examine these tax extenders as part of the tax reform process to determine how best to re-tool incentives, and made it clear he will fight to include these tax extenders as part of the current payroll tax cut conference.

“There are more than 50 of these traditional tax extenders,” he said, “and the frequent threat of expiration causes uncertainty among taxpaying businesses, families and individuals. These tax extenders also narrow the tax base, necessitating higher rates. In addition, the yearly process required to pass each extender package consumes much of the legislative calendar.”

“When Congress provides businesses with long-term incentives that cover their entire business plans, businesses can invest with confidence and our economy can grow,” he added. “Each day businesses do not know whether tax extenders will be in place means less American manufacturing, less production and fewer jobs.”

Baucus concluded that, through tax reform, Congress should address the shortcomings of these tax provisions and choose whether to fix them permanently or allow them to expire.

Orrin Hatch (R - Utah), the Ranking Member of the Finance Committee, confirmed that “it is difficult to find many people who will argue that Congress can, or should, continue dealing with tax extenders in a business as usual manner Even those tax extenders that are sound tax policy lose much of their power due to their temporary character.”

He pointed out, for example, that Congress has recently allowed important temporary tax incentives (such as the R&D credit) to expire. "Then, after business decisions have already been made, Congress has retroactively extended the tax provisions. If a provision is worthy of being in the tax code (which the R&D credit is), then it generally should be made permanent,” he said.

He concluded that “certainty in the tax code is a very important factor in allowing businesses to plan their affairs, make investments, and create jobs. And these job creators don’t want bad certainty - they don’t want to hear that their taxes are going up. Congress should provide this certainty by making permanent the provisions that are worthy of remaining in the law, and eliminating those that are not.”

However, the US Chamber of Commerce, in its statement to the hearing, stressed that “the extension of these annual extender provisions cannot be delayed until work on comprehensive tax reform is complete. Taxpayers need stable and predictable rules they can rely upon while that important process is completed. We strongly urge the Committee and Congress to act quickly to extend these longstanding policies and prevent unnecessary damage to the economy and job creators.”