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.