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February 28, 2014

Analysis: Tax reform bill headed for the shelf

Republicans want focus on rates and not revenue

WASHINGTON — Ordinarily, the late-winter introduction of major legislation by the chairman of a powerful committee might signal a major push in Congress for an election-year accomplishment.

That’s not the case with tax reform, which now takes its place in the “do not disturb” corner with immigration legislation, trade bills and an increase in the federal minimum wage.

When Rep. Dave Camp, R-Mich., chairman of the House Ways and Means Committee, unveiled his 182-page summary for revising the tax code on Wednesday, it marked the beginning, the high point and the end of the issue for the current Congress.

Even other Republicans said so.

Especially other Republicans.

House Speaker John Boehner, R-Ohio, asked in advance whether the Republican Party stood behind Camp’s campaign-year handiwork, responded carefully. “You’re getting a little bit ahead of yourself,” he said.

A day earlier, Senate Republican leader Mitch McConnell was less charitable, effectively saying Camp was wasting his time. There is “no hope” an overhaul can be accomplished, he told reporters in the Capitol.

McConnell blamed Democrats, who want to use an overhaul of the tax code to raise revenue by $1 trillion over a decade. The Republican leader said if the voters truly want reform, they should give his party a Senate majority in next fall’s elections.

“Now, if we had a new Republican Senate next year, coupled with a Republican House, I think we could have at least a congressional agreement that this is about getting rates down and making America more competitive, you know, not about giving the government even more revenue,” he said.

Democrats, who have other hopes for the fall campaign, seemed unconcerned that Camp was plunging ahead with the kind of policy prescriptions that can easily be turned into attack ads in the fall.

“Any proposal that eliminates the deduction for state and local taxes, as the Republican plan would do, is dead on arrival,” said Sen. Chuck Schumer, D-N.Y., deliberately ignoring Boehner’s protests that Camp’s proposals are his own, and not the property of the party.

So, too, did House Democratic leader Nancy Pelosi. “We will evaluate this Republican plan to see if it meets” the standard for improving the economy, creating jobs and helping the middle class, she said.

The well-understood futility of enacting a tax overhaul this year made for a curious day on Wednesday as Camp unveiled his detailed summary, the special interests weighed in pro and con, and a smattering of lawmakers congratulated the Michigan Republican for his efforts.

The National Association of Realtors issued a statement saying it “supports reforms promoting economic growth, but we strongly oppose altering the rules that govern ownership and investment.”

That particular embrace of the general and rejection of the specific was a reaction to Camp calling for a reduction in the home mortgage tax deduction, part of his overall plan to reduce or eliminate some breaks in exchange for lowering rates for all.

Clarence Anthony, executive director of the National League of Cities, said Camp’s work was well-intentioned, but added: “It will reduce cities’ ability to promote construction jobs and build the foundations for future growth. Municipal and private activity bonds are used to build schools, roads, bridges, hospitals, and develop blighted areas of the community.”

At his news conference, Camp declared, “The time to act is now” as he made public his plan, the results of months of painstaking study and struggle.

Just how painstaking?

His committee held more than 30 hearings, including the first joint airing of the issue with the Senate since World War II, he noted. He and House Democrats formed 11 bipartisan working groups and created a website that has received 14,000 public comments.

He and ex-Sen. Max Baucus, the former chairman of the Senate Finance Committee, made a handful of joint beyond-the-Washington Beltway appearances to try to build support for their legislative priorities. Baucus is now U.S. ambassador to China.

Yet as Camp spoke, Congress yawned.

Rank-and-file Republicans, who customarily issue statements welcoming even relatively minor bills, sheathed their news releases when it came to Camp’s work.    

Sen. Ron Wyden, D-Ore., and Sen. Orrin Hatch, R-Utah, the chairman and senior Republican, respectively, on the Senate Finance Committee, issued a statement praising Camp for his efforts.

“We look forward to working with members in both chambers and on both sides of the aisle to move the conversation forward,” they wrote.

They made no pledge to try to produce their own version of a comprehensive overhaul of the tax code, or even separate ones. They offered no commitment to hold hearings on Camp’s work.

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