Purity Vanishes When Reality Bites

Governing means making tough choices — and the reaction to Dave Camp’s tax reform plan makes it clear that this will not be a year for tough choices.

Ranking Member of the House Ways and Means Committee Congressman Dave Camp (L) speaks during a House Ways and Means Committee markup hearing on The Currency Reform for Fair Trade Acton September 24, 2010 on Capitol Hill in Washington, DC. The bill would amend the Tariff Act of 1930 to increase the Department of Commerce's power to impose duties on China over its currency under-valuation. AFP PHOTO/Mandel NGAN (Photo credit should read MANDEL NGAN/AFP/Getty Images)
National Journal
Norm Ornstein
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Norm Ornstein
March 19, 2014, 8 a.m.

The cli­mate this year for sig­ni­fic­ant policy ac­com­plish­ment is as grim as it could be.

The ob­ject­ives for Re­pub­lic­ans were set early on by the sched­ule pro­posed by House Ma­jor­ity Lead­er Eric Can­tor: few­er than 90 days in ses­sion be­fore the elec­tion (in­clud­ing many half-days and pro forma ses­sions — and that num­ber may get smal­ler along the way), and more votes, now up to 50 over­all, on re­peal­ing Obama­care. And there was the memo from the ma­jor­ity lead­er mak­ing it clear that any­thing that might di­vide Re­pub­lic­ans head­ing in­to an elec­tion about the per­form­ance of the Obama ad­min­is­tra­tion is a non­starter.

Demo­crats in Con­gress, who will be judged more by per­form­ance than Re­pub­lic­ans, would love to have some sign­ing ce­re­mon­ies in le­gis­lat­ive areas ran­ging from jobs and in­fra­struc­ture to edu­ca­tion, ex­ten­sion of un­em­ploy­ment be­ne­fits, and the min­im­um wage. This is true even though many Demo­crats might prefer to have a pop­u­lar is­sue like the min­im­um wage to use against Re­pub­lic­ans and counter the cri­ti­cism of Obama­care.

This dy­nam­ic makes it even more in­ter­est­ing to see Dave Camp, the Re­pub­lic­an chair­man of the House Ways and Means Com­mit­tee, come out with a bold and de­tailed tax-re­form plan — not just a “frame­work” that ducks the tough ques­tions — and to note Eric Can­tor’s pledge to come up with, and pass, a Re­pub­lic­an al­tern­at­ive to Obama­care. Could it be that we are on the verge of a new age, one where mean­ing­ful, ma­jor sub­stant­ive policy al­tern­at­ives are on the table, ready for real de­bate on the battle­ground of ideas? And maybe even pro­gress?

Nah.

It did look prom­ising for tax re­form at the start. Camp’s draft plan star­ted with ex­traordin­ar­ily pos­it­ive re­sponses (with caveats, of course) from pres­ti­gi­ous in­di­vidu­als and groups on the left and the right. Wash­ing­ton Post colum­nist Steve Pearl­stein and The Post ed­it­or­i­al board, along with lib­er­als Jonath­an Chait and Mat­thew Yglesi­as, were com­pli­ment­ary, as were con­ser­vat­ives like Alex Brill, Ed Ro­gers, and Timothy Car­ney. There were quibbles about the de­tails, but the fact that Camp had done what he set out to do — re­duce tax rates, sim­pli­fy the code, and keep the plan (at least for 10 years) rev­en­ue neut­ral, while also hit­ting the rich and ma­jor spe­cial in­terests to en­able him to re­duce the rates — was re­fresh­ing and ad­mir­able. Camp’s plan also provided a ter­rif­ic start­ing point for real de­bate and de­lib­er­a­tion about ma­jor tax re­form. In that sense, it re­minded me of the Brad­ley-Geph­ardt plan in the mid-1980s that provided the frame­work for the 1986 tax re­form.

But the en­thu­si­asm for the ef­fort and the frame­work that was ex­pressed by ed­it­or­i­al writers, in­tel­lec­tu­als, and many journ­al­ists and tax ana­lysts was not shared by the rel­ev­ant pols. There was no en­thu­si­asm shown by the Obama White House to en­gage Camp, lead­ing Pearl­stein to lament the loss of a great head­line: “Dav­id Camp Heads to Camp Dav­id.” There was no pos­it­ive re­sponse from House or Sen­ate Demo­crats. And then came the real kick­er: Speak­er John Boehner, a close ally of Camp’s, re­acted to his plan at a press con­fer­ence by say­ing “Blah, blah, blah.” Ouch.

The re­ac­tion by Demo­crats was in part a tri­bal re­ac­tion: If he is for it, we can’t be. For many of them, Camp in oth­er ven­ues has been a hard-driv­ing par­tis­an, shut­ting out Demo­crats from ac­tions on the com­mit­tee (in sharp con­trast from how Dan Ros­ten­kowski treated Re­pub­lic­ans dur­ing con­sid­er­a­tion of tax re­form lead­ing up to 1986.) Camp has vied with Dar­rell Issa in over-the-top par­tis­an ac­tions and rhet­or­ic against the IRS. But even so, this was a ser­i­ous plan with a lot for Demo­crats to like.

The oth­er ele­ment, I sus­pect, is that Demo­crats don’t have a lot of in­terest in tax re­form that is rev­en­ue neut­ral. It will in­ev­it­ably cre­ate win­ners and losers, and some of those losers will be Demo­crat­ic voters, es­pe­cially as rate re­duc­tions lead to cap­ping or elim­in­at­ing pop­u­lar de­duc­tions like the state and loc­al tax de­duc­tion or the one for mort­gage in­terest. Demo­crats, in­clud­ing the pres­id­ent, see tax re­form as a vehicle to get rev­en­ues, as part of a lar­ger bar­gain to re­duce the long-term debt. Em­brace rev­en­ue-neut­ral tax re­form, and you give up the best vehicle to achieve the great­er goal.

For Re­pub­lic­ans in Con­gress, any im­pulse to em­brace or even say good things about the Camp plan was quashed quickly by the GOP monied in­terests whose ox­en were gored by the plan — in­clud­ing hedge-fund bil­lion­aires hit by the changes in tax treat­ment of car­ried in­terest (re­mem­ber, an idea that bil­lion­aire Steph­en Schwar­z­man once equated to Hitler in­vad­ing Po­land), and the big banks hit by the Camp idea to tax the “too big to fail” fin­an­cial in­sti­tu­tions that es­caped un­scathed in the fin­an­cial melt­down. As Jon Chait de­tails in his column, “Wall Street un­leashed a furi­ous cam­paign to des­troy and isol­ate Camp, can­celing all fun­draisers for the party un­til his fel­low mem­bers agreed to de­nounce his heresy.” Soon, a pas­sel of House Re­pub­lic­ans, Camp’s friends and neigh­bors, sent him a let­ter de­noun­cing his plan, and em­bra­cing their ver­sion of crony cap­it­al­ism.

But the prob­lem goes bey­ond the usu­al bi­par­tis­an dy­nam­ic of spe­cial in­terests jerking the chains of their bud­dies on Cap­it­ol Hill. For Re­pub­lic­ans in Con­gress, prob­lem solv­ing is simply not high on the pri­or­ity list. Real ef­forts at prob­lem solv­ing re­quire re­cog­niz­ing that your de­sire to ful­fill your ideo­lo­gic­al be­liefs must fit the tradeoffs and real­it­ies of the real world. And it means that ideas — when sub­ject to tests like mak­ing the num­bers add up without ma­nip­u­la­tion or rank dis­hon­esty — re­quire ad­just­ments, com­prom­ises, and pain for your friends and sup­port­ers.

There is a lazi­ness that comes with be­ing in the minor­ity — you don’t have to make tough choices; you can simply rail against everything done by the ma­jor­ity. Gov­ern­ing means mak­ing tough choices, and it is clear that des­pite their House ma­jor­ity, con­gres­sion­al Re­pub­lic­ans are not ready to do that, either on im­mig­ra­tion, tax re­form, jobs pro­grams, or health policy. Nor have they been will­ing to em­brace the in­nov­at­ive ideas com­ing from the con­ser­vat­ive in­tel­lec­tu­al and policy com­munity.

We will see, in com­ing weeks, if that as­ser­tion is wrong across the board. Will Paul Ry­an and the House Re­pub­lic­ans come up with their own budget this year? And most im­port­antly, will the prom­ise to come up with a real health re­form al­tern­at­ive — mean­ing not vague prin­ciples or a set of talk­ing points, but a real bill, scored by the Con­gres­sion­al Budget Of­fice and sub­ject to strict scru­tiny by health policy ana­lysts and the pro­vider com­munity — be met? The early re­turns are not prom­ising; in­stead of a bill this spring, we are go­ing to see a “listen­ing tour” around the coun­try. “Listen­ing tour” is polit­is­peak for “We are not ser­i­ous.”

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