Camp’s Tax Plan — a Road to Nowhere?

WASHINGTON, DC - OCTOBER 29: House Ways and Means Committee Chairman Dave Camp (R-MI) presides over a hearing about the implimentation of the Affordable Care Act in the Longworth House Office Building October 29, 2013 in Washington, DC. Centers for Medicare and Medicaid Services Administrator Marilyn Tavenner is the first Obama Administration to testify before Congress since the troubled launch the federal exchange website. 'I want to assure you that Healthcare.gov can be fixed, and we are working around the clock to give you the experience that you deserve,' she said.
National Journal
Billy House
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Billy House
Feb. 20, 2014, 6:29 a.m.

Word that Ways and Means Chair­man Dav­id Camp plans to re­lease de­tails of a tax-re­form pack­age next week re­sur­rects a fun­da­ment­al ques­tion. Or two. Or more.

For in­stance, how does Camp pay for it?

Or, for that mat­ter, how does he get enough votes in a midterm elec­tion year to pass it? And even be­fore it gets to that — can a hes­it­ant or even out­right op­posed GOP lead­er­ship be sud­denly turned around to get the bill to the floor?

An­swers from Camp’s team wer­en’t avail­able Thursday. And how much of all of this is to even be answered is any­one’s guess with as­pects of his plan ex­pec­ted to be re­leased as early as Wed­nes­day.

Mean­while, whatever Camp does an­nounce threatens to be up­staged a bit. House Re­pub­lic­ans plan to bring an­oth­er tax-re­lated bill to the floor next week that they hope will get a lot of at­ten­tion, but which Demo­crats dis­miss as a purely polit­ic­al-mes­saging man­euver. The meas­ure would delay new rules re­com­men­ded by the In­tern­al Rev­en­ue Ser­vice to curb a surge in polit­ic­al spend­ing and activ­ity by non­profits, with crit­ics say­ing the rules are too broad.

Of course, ac­tu­al re­form of the wieldy tax code had been pegged even be­fore this ses­sion as the No. 1 pri­or­ity of Speak­er John Boehner and oth­ers — and they even re­served the prime des­ig­na­tion H.R. 1 to sig­ni­fy its im­port­ance.

But H.R. 1 has re­mained empty, and there has been no prom­ise that Camp ac­tu­ally in­tends for his com­mit­tee to mark up his tax-re­form pro­pos­als. And with elec­tions com­ing — des­pite Camp’s man­euv­er­ing next week — there has been a grow­ing ac­cept­ance for months that H.R. 1 will not see ac­tion be­fore the end of the ses­sion — at least not as prom­ised.

“It’s un­usu­al, and it’s an em­bar­rass­ment,” said Rep. Charles Ran­gel, a New York Demo­crat, who has served since 1970.

Not that Camp hasn’t already done a great deal of work on tax re­form, just as Max Baucus did when he was still Sen­ate Fin­ance Com­mit­tee chair­man. Camp is also ra­cing against the clock, be­cause he will be term-lim­ited from his chair­man­ship at the end of 2014.

For their part, House Demo­crats say the prob­lem is that Re­pub­lic­ans have pur­sued a totally par­tis­an ap­proach, and that de­tails they’ve been giv­en from Camp and his crew don’t add up.

They say Re­pub­lic­ans gave them an ul­ti­mat­um at a meet­ing last sum­mer that they could be part of the pro­cess in writ­ing the bill — that is, if they agreed to go along with lower­ing the cor­por­ate tax rate from 35 per­cent to 25 per­cent, and for top in­di­vidu­al earners from 39.6 per­cent to 25 per­cent.

At the same time, Demo­crats say that plan did not con­tain spe­cif­ic ways to re­place that lost rev­en­ue. The simple fact, ac­cord­ing to Demo­crats, is that Re­pub­lic­ans have not been able to make the math work — and to do what they want to do would add $5 tril­lion to the de­fi­cit.

On Thursday, Demo­crats said there was talk that Camp may have ac­tu­ally re­cently re­vised his own plan, so that his top rate may not be lowered be­low 30 per­cent, after all. But they say they ex­pect gim­micks will be needed to pay for it, any­way. One big gim­mick an­ti­cip­ated, they say, is ex­pand­ing the Roth IRA, which could raise a lot of money now but cost a lot of money in the fu­ture.

“We’re go­ing to be re­quest­ing a 20- to 30-year Con­gres­sion­al Budget Of­fice score,” said one seni­or Demo­crat­ic aide.

As re­cently as last month at a policy re­treat for House Re­pub­lic­ans, Camp re­mained non­com­mit­tal about wheth­er a tax-re­form pack­age would come to the floor this year. Camp said he and oth­er Re­pub­lic­ans did talk dur­ing a closed-door “give and take” ses­sion about wheth­er tax re­form should be part of their 2014 le­gis­lat­ive agenda. But he em­phas­ized that no de­tails were dis­cussed, and he hes­it­ated about wheth­er a bill would emerge this year.

“Cer­tainly, with my com­mit­tee mem­bers, we’ve gone in­to great de­tail. But this was about wheth­er this is­sue should be one of the is­sues on the Re­pub­lic­an agenda,” said Camp.

But oth­er Ways and Means Com­mit­tee Re­pub­lic­ans saw dim pro­spects.

Not only is Camp likely step­ping aside as chair­man next year, but many as­sume Budget Chair­man Paul Ry­an will suc­ceed him. Mean­while, Baucus is leav­ing the Sen­ate for a po­s­i­tion as U.S. am­bas­sad­or to China.

And while Baucus late last year re­leased broad out­lines of his ver­sion of a tax over­haul be­fore leav­ing, it met with highly mixed res­ults and was destined to go nowhere fast in the Sen­ate.

“Every­body wants tax re­form in the 30,000-foot view, OK?” said Rep. Vern Buchanan, a Flor­ida Re­pub­lic­an, who is on the House Ways and Means Com­mit­tee. “But now, the dev­il is in the de­tails.”

Oth­ers on the com­mit­tee say GOP lead­ers and oth­er Re­pub­lic­ans have been wor­ried act­ing on a tax-over­haul plan with midterm elec­tions com­ing this fall, as the plan could gen­er­ate fierce cri­ti­cism from groups who be­lieve they would be un­fairly or wrongly hit by the pro­posed changes.

With no chance of their plan be­ing backed by Demo­crats in the House and Sen­ate, many Re­pub­lic­ans also do not want to draw any elec­tion-year fo­cus away from their at­tacks on the Af­ford­able Care Act.

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