Tax Reform Faces Long Odds Even With Dave Camp at the Helm

A key player won’t be distracted by a Senate race, but that isn’t enough in itself to change the odds.

In this photo taken July 8, 2013, Senate Finance Committee Chairman Sen. Max Baucus, D-Mont., left, and the House Ways and Means Committee Chairman, Rep. Dave Camp, R-Mich., talk about tax reform to 3M employees at the 3M Innovation Center in Maplewood, Minn. Two of the most powerful members of Congress, Baucus, a Democrat, and Camp, a Republican, are touring the country to rally support for their effort to overhaul the nationís tax laws. They've developed a close friendship as they work to attract other lawmakers to their cause while helping Democrats and Republicans get to know each other a bit better. Their secret weapon: burgers and beer.
National Journal
Nancy Cook
Aug. 17, 2013, 2 a.m.

Tax re­form re­mains a long shot this fall — just as it al­ways was be­fore, dur­ing, and after Re­pub­lic­an Rep. Dave Camp flir­ted with a run for a U.S. Sen­ate seat.

The House Ways and Means Com­mit­tee chair­man an­nounced Fri­day that he would not run for the Michigan Sen­ate seat, and im­me­di­ately, the ques­tion arose: What, if any­thing, does it mean for tax re­form this fall if Camp does not have to de­vote ma­jor time to cam­paign­ing?

Not as much as you might think. Tax re­form faced many, many hurdles re­gard­less of the dir­ec­tion of Camp’s fu­ture polit­ic­al ca­reer. Here are a few to think on:

Rev­en­ue: Neither party can agree on how much money any over­haul of the tax sys­tem should raise. Demo­crats want to raise ad­di­tion­al rev­en­ue to either fund stim­u­lus-like pro­grams or to pay down the de­fi­cit. Re­pub­lic­ans think tax re­form should not raise any more money than the code cur­rently does. For­get find­ing a com­prom­ise on a lower cor­por­ate tax rate between the two parties. This is a ma­jor philo­soph­ic­al stick­ing point and one of the biggest im­ped­i­ments.

Little sup­port from lead­er­ship: Re­pub­lic­an House Speak­er John Boehner has said that he has re­served a bill spe­cific­ally for tax re­form; that’s a nice sym­bol­ic ges­ture to sup­port his old friend Camp. But Boehner is not ex­actly out there selling any spe­cif­ic tax plan to elim­in­ate tax de­duc­tions or clean up the code.

The Sen­ate lead­er­ship ex­presses even less en­thu­si­asm. Ma­jor­ity Lead­er Harry Re­id re­fused to par­ti­cip­ate in the Sen­ate’s top tax writers’ ex­er­cise to ex­am­ine the tax code. (The Sen­ate Fin­ance Com­mit­tee lead­ers had asked law­makers to de­fend their fa­vor­ite tax breaks in private let­ters, but Re­id re­fused to play along and pub­licly dissed the pro­cess to re­port­ers). A num­ber of top Sen­ate Re­pub­lic­ans sim­il­arly urged their mem­bers to not even wade in­to tax re­form un­til the rev­en­ue ques­tion (see above) was settled.

House Demo­crats: Camp has prom­ised to un­veil a tax re­form bill with­in the Ways and Means Com­mit­tee this fall, but it will be hard to make that ap­pear broadly pal­at­able un­less some House Demo­crats on the com­mit­tee sup­port it. Tax lob­by­ists in town are closely watch­ing this pro­cess of court­ing House Demo­crats. So far, none have pub­licly signaled their sup­port for a Camp bill. If they don’t, this eas­ily could look like a par­tis­an Re­pub­lic­an ex­er­cise — an­oth­er pos­sible killer of tax re­form.

Risk to the GOP: And, if few or no House Demo­crats sup­port Camp’s tax re­form draft le­gis­la­tion, then the Re­pub­lic­ans run a ma­jor polit­ic­al risk. If they pro­pose, for in­stance, cut­ting the cor­por­ate tax rate and pay­ing for it by slash­ing some tax de­duc­tions near and dear to Amer­ic­ans, then they’ll look like friends to ma­jor cor­por­a­tions and wealthy people. That play­book did not work well for Mitt Rom­ney, when the Demo­crats used it against him in last year’s pres­id­en­tial cam­paign.

Add all of this up and it re­in­forces the polit­ic­al dif­fi­culty of passing a ma­jor tax-re­form pack­age in the next year or two, even with all the time and at­ten­tion Camp can now af­ford to lav­ish on the pro­ject.

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