POLITICO: Dave Camp, Max Baucus dream of a new tax code
By Anna Palmer and Jake Sherman
Capitol Hill leaders might not be sold yet on rewriting the Tax Code in the next year, but two key tax-writers are trying anyway — building a powerful coalition of players on K Street, in the Capitol and among President Barack Obama’s trusted advisers.
The two men, Rep. Dave Camp, chairman of the Ways and Means Committee, and Senate Finance Chairman Max Baucus, have pockets filled with Washington chits and nothing to lose — Baucus, a Democrat, is retiring in 2014 after nearly 40 years in Washington, and Camp, a Republican, is losing his committee gavel.
The back-channel, bipartisan coordination stands in stark contrast to, well, just about everything else this divided Washington has seen since 2011.
And perhaps more important, they hope it will lead to a wide-ranging base of support for an overhaul — the kind of pressure that could force the hand of House and Senate leaders ambivalent about moving ahead with a bill.
There are signs of progress. After Camp’s aides swapped tax overhaul proposals with the Treasury Department, his staff opened Obama’s budget and were surprised to see one of the Michigan Republican’s financial products taxation proposals.
When Congress is in session, Camp and Baucus have held weekly meetings on reform.
Baucus has also made tax reform a major component of his weekly calls with Treasury Secretary Jack Lew, has met with every member of the finance panel and is also meeting one on one with freshman senators. On Tuesday, he met with Sens. Tammy Baldwin of Wisconsin and Chris Murphy of Connecticut to discuss their priorities on tax reform.
Tax reform has also gained new steam of late as Baucus and Camp have brought up trying to tie it to an increase in the nation’s borrowing limit.
“I’m very focused,” Baucus told POLITICO of his efforts on tax reform. “It’s getting a head of steam; it’s getting legs; and I’m very happy to see that.”
Still, Baucus and Camp know they are underdogs of sorts when it comes to this cause. Tearing up and rewriting the Tax Code has been a priority of both parties for years — but it hasn’t happened.
Several tax lobbyists said that they are still pessimistic that a massive bill will get enacted. But they are nonetheless advising clients to make sure they are in the game — meaning spending money to influence lawmakers and their aides. Even if the effort doesn’t get far, it will set the table for future tax bills.
There’s are questions in House Republican leadership about the feasibility of tax reform — Majority Leader Eric Cantor (R-Va.), most notably, is unsure of whether the Senate will move a tax reform bill, which could leave his members taking political risks alone.
Beginning Wednesday, Democrats and Republicans on the Ways and Means Committee will begin privately hammering out details on a number of newly written tax proposals. In the Senate, the Finance Committee is continuing to hold meetings focused on individual issues of tax reform, with Thursday’s focused on international tax issues. The proposals will be used as the planks to build legislation.
Both Camp and Baucus are readying an effort that will engage public citizens in the tax reform process.
Wooing lawmakers in the Capitol is one thing, but more important, Baucus and Camp are working key offices of K Street, briefing corporate America on their legislative plans. It would give a chance for both parties to repair relationships with the business community, which has been stymied in its pricey push to trim the nation’s deficit.
Amber Cottle, Baucus’s newly installed staff director, met Thursday with roughly 25 lobbyists and company representatives at the offices of Capitol Counsel, a top tax lobby shop.
The meeting, which was at Capitol Counsel’s request, was squarely focused on tax reform. Cottle told the group that Baucus wanted to see the Senate Finance Committee finish its work by December and the full Senate to pass a bill in 2014, according to sources in the meeting.
“Senate Finance Committee staff meet with key stakeholders — leaders from business, labor, nonprofits, academia and constituents — as part of education and outreach efforts to build support for comprehensive tax reform,” said Sean Neary, a spokesman for the committee.
Camp is in the game, too.
Camp allies have told lobbyists they were aiming to woo at least a handful of Democrats on Ways and Means to support the legislation in committee, an attempt to try to put pressure on Speaker John Boehner and his leadership to bring tax reform to the floor this Congress. Names that have been floated as targets include Democratic Reps. Richard Neal of Massachusetts, Joe Crowley of New York, Earl Blumenauer of Oregon and Ron Kind of Wisconsin.
Camp’s pitch is also meant to instill some fear in corporate America and its representatives in Washington. If corporations don’t vocally support a full overhaul of the Tax Code, Washington will continue to pick at narrow, business-friendly, industry-specific tax provisions in upcoming fiscal battles.
All this comes as Republican leadership tries to coalesce around whether it will enact tax reform and how it will push it through the Capitol. There’s some movement among GOP leadership — mostly led by Majority Whip Kevin McCarthy of California — to move forward with tax reform. The debt ceiling is a natural leverage point, Republicans say.
Boehner is supportive of Camp’s work and wants him to prove that he can get the votes to move tax reform. Cantor is supportive of the process but cool to the feasibility of tax reform, because he’s skeptical the Senate will act. According to several people who have spoken to Cantor and his senior aides, the Virginia Republican — a former member of the Ways and Means Committee — is worried about making difficult decisions to eliminate personal and corporate deductions without political cover from the Senate passing a bill simultaneously.
“Leader Cantor has always wanted to pursue pro-growth tax reform and pushed for it in February in his Making Life Work speech and often since,” his spokesman Rory Cooper said in an email. “In divided government, tax reform must be done on a bipartisan basis, which is why he is pleased to see Chairman Camp and Chairman Baucus working so hard together towards that end. Frankly, if the White House showed the same commitment to tax reform as Camp and Baucus, we’d be even further along.”
The resistance isn’t only at the Elected Leadership Committee, the top rung of Republican leadership. There’s no sense that Democrats and Republicans will be able to bridge their differences on whether tax reform should generate revenue.
Neal said, “If you link the debt ceiling to tax reform, it’s a nonstarter for Democrats on the committee. I think the process has been conversational in tone to the moment, and I think it’s been very helpful.”
Neal did say there’s been a lot of “goodwill” built up on the Ways and Means Committee.