Boehner makes tax reform top priority

Boehner makes tax reform top priority

Speaker John Boehner signaled Tuesday that he will push major reform of the tax code by reserving pole position — H.R. 1 — for that massive legislative undertaking.

The decision, confirmed by the Ohio Republican’s office, underlines the GOP’s determination to press ahead with the first rewrite of the tax code since 1986 despite concerns within the party.

“Fixing our tax code is one of my highest legislative priorities for this Congress,” Boehner said in a Tuesday speech to the Credit Union National Association. “It’s time we shift the balance of power from the tax collector to the taxpayer.”

Designating tax reform as H.R. 1 far from ensures that it will become law this year, or even that it will make its way through the House.

But the decision does send a clear signal that the GOP is not backing away from the longstanding goal despite significant hurdles.

Boehner’s full-throated support for tax reform serves another purpose as well.

With some $85 billion in automatic spending cuts set to start later this week, the Speaker is also trying to repel President Obama’s claims that Republicans aren’t interested in eliminating tax loopholes utilized by the wealthy.

While the White House and congressional Democrats want to scrap those preferences for deficit reduction. Boehner and Republicans believe the savings should instead be earmarked for tax reform.

“Spending is the problem, and spending cuts are the solution,” Boehner said. “Yes, we should close loopholes, but we should do it as part of tax reform that lowers rates and helps create jobs. And again, this should be one of Washington’s highest priorities.”

House Republicans used H.R. 1 in the last Congress for a government funding measure that would have slashed spending, spurring the spending debate that has repeatedly put the government on the verge of shutdowns and default over the last two years.

Before that, House Democrats used that bill number for the controversial 2009 stimulus package. It became one of the first signature bills Obama signed into law.

In the current Congress, the top tax-writers in both chambers have vowed to make tax reform a priority this year.

Rep. Dave Camp (R-Mich.), a longtime Boehner ally and the chairman of the House Ways and Means Committee, has made clear that he plans to pass a tax reform bill out of his panel this year.

Camp told reporters on Tuesday that Boehner had signaled his full backing on tax reform with the H.R. 1 designation, even as he also declined to speculate when his panel would unveil a broad package or when, and if, it would hit the House floor.

“It’s certainly not going to be in the next six weeks,” Camp said in response to a question about the timing of a Ways and Means bill.

The Michigan Republican acknowledged, just days before the sequester is scheduled to hit, that tax reform could continue to get sucked into future fiscal debates, such as over the expiring stopgap spending resolution or raising the debt limit.

“I’m not naïve about how difficult this is, and about how complicated it is,” said Camp, who still supports lowering top tax rates to 25 percent even after the “fiscal cliff” deal raised the top individual rate to almost 40 percent.

“I don’t pretend or act as if this is going to be an easy process. But it’s something that’s going to be important to do to grow the economy,” he said.

The Senate’s top tax-writer, Finance Committee Chairman Max Baucus (D-Mont.), also reiterated on Tuesday that tax reform would be a top priority for his committee this year.

Camp and Baucus forged a good working relationship during the last Congress, Camp’s first as Ways and Means chairman.

But Baucus is also up for reelection next year in a state carried by Mitt Romney in the presidential election, which could further complicate the drive for tax reform.

Camp, meanwhile, is in his last scheduled term atop the Ways and Means panel, giving him perhaps even more reason to press full-speed ahead on what he admits is his goal above all else.

“Obviously, of these areas I have a favorite, and my favorite is tax reform,” Camp told reporters at a briefing on the committee’s agenda, which also includes increasing U.S. trade markets and making improvements to the country’s social safety net.

Still, as the recent fiscal debates have shown, Democrats and Republicans have yet to agree on fundamental issues like the size of government and spending levels for entitlement programs.

“I don’t know how you do tax reform if you don’t know how much money the government is going to collect,” said Clint Stretch, formerly of Deloitte Tax and the Joint Committee on Taxation.

With that in mind, GOP lawmakers have expressed concern that a tax reform vote could force them to weigh in on eliminating popular or entrenched tax breaks, only to see their effort die in a Senate still controlled by Democrats.

Rep. James Lankford (R-Okla.), one of those skeptics, said he still had his concerns that a House tax reform measure would get bogged down in the Senate.

And GOP lawmakers like Lankford have said that the White House hasn’t shown the leadership needed to push tax reform over the finish line like President Reagan did in 1986 during the last successful tax overhaul.

“I want it to happen,” Lankford, chairman of the House Republican Policy Committee, told The Hill. “I just don’t want this to be Lucy and the football with the White House or with the Senate.”

For his part, Baucus has stressed that, unlike most Republicans, he believes more revenues are needed to help reduce deficits. But the Montana Democrat would also like to capture those revenues as quickly as possible, which would allow Congress to concentrate more fully on tax reform.

Jack Lew, Obama’s nominee for Treasury secretary, suggested earlier this month that the administration backed reforming both the individual and corporate tax codes. But Lew, whose nomination cleared the Finance panel on Tuesday, also said that a comprehensive tax overhaul would be a heavy lift.

“I think that the committee needs to assert itself. And that’s obviously easier said than done,” said Rep. Richard Neal (Mass.), a senior Democrat on the House Ways and Means Committee. “The question is now; do we have the fortitude to take it up?”

Source: The Hill