If this were baseball, they might say House Republicans are painting the corners when it comes to changing the tax code.
If we’re talking about Clayton Kershaw of the Los Angeles Dodgers or Johnny Cueto of the Cincinnati Reds, that’s a good thing. Those guys fire strikes that just nip the black of home plate. This fools batters. Hitters don’t know whether to swing or not. Make an offering and you might not even nick the pitch as it crosses the plate. Sit back on your heels and take the pitch? Well, frozen pizza. You risk being rung up on strikes on a pitch that just catches the strike zone.
Painting the corners.
House Republicans approved a surfeit of tax-reform measures recently, all tied thematically to tax day, April 15. Republicans voted to eliminate the so-called death tax, the penalty wealthy families pay in real estate and other holdings when a relative dies. They voted on a “Taxpayer’s Bill of Rights” to give Americans more options when dealing with the IRS. They approved a measure to allow for additional fairness when deducting state and local taxes. Finally, the House OK’d a plan to make permanent the deduction of those taxes.
“I think we've got a better approach on the Republican side. Reduce the tax burden that American families have to pay and raise their incomes through a better economy and better jobs,” trumpeted House Speaker Rep. John Boehner, R-Ohio.
“With tax day right around the corner, I certainly heard a lot about taxes, and the question as to when Congress is going to pass tax reform --which across the board, people recognize as long overdue,” opined House Republican Conference Chairwoman Cathy Rep. McMorris Rodgers, R-Wash. “We really do need a tax code that puts people first.”
All well and good. Except these exercises are far from fundamentally reforming the nation’s tax system. In other words, Republicans mimicked Clayton Kershaw or Johnny Cueto, painting the corners. They worked the edges of the plate when it comes to tax policy.
But executing a major retrench of the nation’s tax laws isn’t baseball. Republicans and many Democrats have crowed for decades that Congress needs to drastically overhaul America’s tax system. Congress hasn’t ushered to passage a major piece of tax reform legislation since 1986. And to do tax reform, lawmakers can’t nibble around the edges of the plate like Messrs. Kershaw and Cueto. No. They need to take a different approach and serve up a real watermelon, right down Broadway. Down the heart of the plate. Such an approach is precisely the opposite tactic pitchers want to take with good hitters like Mike Trout or Giancarlo Stanton. But dusting the corners won’t work when it comes to tax reform.
“Everything is on the table except raising taxes,” declared House Ways and Means Committee Chairman Rep. Paul Ryan, R-Wis., when asked by reporters at a recent forum about what shape a potential tax-reform package might take.
Ryan’s the guy to ask. He, along with Senate Finance Committee Chairman Sen. Orrin Hatch, R-Utah, would be tasked with crafting a big tax-reform bill. But in a similar setting with scribes over the winter, Ryan signaled that even though we’re not even four months into the 114th Congress, time for a major bill is already running short.
“Tax reform is a 2015 thing for sure,” said Ryan when asked about a possible timetable. “It has to be done by the end of the summer … . If it goes back past summer, it’s hard to see how that gets done.”
Ryan believes that tax reform must be comprehensive. Reporters asked him if it was possible to alter some specific tax areas in lieu of a grand package.
“I don’t think it’s helpful to do tax reform overall if you carve out sections,” said Ryan about changing some overseas business rates. “If you just do a narrow, international (bill), that may make it harder to do tax reform later.”
So what is Congress left with? Painting the corners, which is what the House voted on last week -- timing the votes to coincide with April 15.
“I think we’re going to reform this tax code sometime between one and three years” from now,” said Ryan, even arguing that tax reform was the real way to fix the Internal Revenue Service.
But don’t doubt Ryan’s determination to do tax reform in the near future. In fact, he said one of the reasons he elected to forgo a presidential bid next year was because of his commitment to authoring tax reform.
“I see a window of getting things done and I don’t want to be clouded by” running for president, Ryan said.
Reforming the tax code resides as one of the most powerful mantras of the GOP. But it’s an elusive goal. The revolutionary, Republican House and Senate of the mid-1990s didn’t pull it off. Nor did Republicans when they had President George W. Bush in the White House for six years. Perhaps not reforming the tax code actually works to the GOP’s advantage. Consider all of the various tax-reform ideas spewing from bona fide or possible Republican presidential candidates. The GOP seemingly “owns” the tax issue. Presidential hopefuls can talk ad nauseam about fixing the tax code. Eliminating shelters. Lowering rates. Making the code flatter and fairer. And yet hold none of the responsibility -- because it makes for a fabulous issue -- be it on the presidential stump or campaigning for a House seat at a fire department fish fry.
Listen to Boehner from earlier this week in an interview on Fox:
“We want tax reform. It’s critically important for our country. We’ve got a tax system that no one understands. Not even the IRS understands,” he said. “If we had a flatter, simpler tax code that would allow 95 percent of the American people to do their own taxes, we’d have a much healthier economy.”
Of course, the trouble with actually reforming the tax code is the sheer breadth and scope of the problem. Fixing the code will require buy-in from both parties. Various groups and well heeled K Street lobbyists will push to protect their respective interests. In other words, there is a lot of political muscle that opponents can deploy against tax reform. And that’s what makes it the Herculean challenge.
“It’s hard to do tax reform without the active involvement of the administration,” criticized Boehner during his Fox interview.
There is, however, a possibly unique parliamentary option lingering that could smooth some rough roads if Republican leaders elect to tackle tax reform this year. It’s called budget reconciliation.
Members from both bodies will soon vote to blend separate budgets crafted by the House and Senate. “Reconciliation” is a special process that lives in the congressional budget bailiwick. Congressional leaders sometimes use budget reconciliation to advance major, nettlesome issues. The quintessential rights of senators are unlimited debate and an unlimited amendment process. But budget reconciliation quashes that. It curbs debate, virtually eliminates Senate filibusters and reduces the threshold to adopt almost anything to a simple majority. It sets aside the super-majorities that often derail the Senate’s legislative aspirations.
Remember when Democrats ran the show on Capitol Hill and struggled to approve ObamaCare? Guess how they ultimately did it? They used the Senate’s budget reconciliation process.
Congressional leaders haven’t quite put the kibosh on tucking an option to do tax reform into the pending, final version of the budget, called “reconciliation instructions.” But it’s possible.
“I think we’d like to have a little more flexibility when it comes to what we use reconciliation for,” said Boehner when asked whether Congressional negotiators would leave the door open for tax reform via reconciliation.
Boehner refused to elaborate on what he meant by “flexibility,” whether he was referring to tax reform, repealing the Affordable Care Act (ACA) or something else.
“Flexibility,” Boehner reiterated when asked for clarification, drawing laughter.
House Majority Leader Kevin McCarthy also kept it vague when asked for more detail of the GOP’s reconciliation goals, during a weekly colloquy on the floor with Minority Whip Rep. Steny Hoyer, D-Md., about the House schedule. But McCarthy did go a little further than Boehner when he huddled with reporters.
“I want as much flexibility as possible,” said the California Republican when asked about the GOP’s approach.
But then McCarthy got specific, perhaps even tipping his hand a bit.
“I would like to have the option to do more than repeal the ACA,” McCarthy said when speaking about reconciliation. “I look forward to getting tax reform done. The last time, they used reconciliation.”
For his part, Ryan’s not committed to reconciliation, saying at a winter-time gathering with reporters: “I don’t know if we’ll use reconciliation” and “We probably don’t need to.”
But Hatch was skeptical reconciliation was on the table this round for tax reform.
“I’m not opposed,” Hatch said. “But there are enough things we have to work through.”
However, Hatch indicated he willing to use the reconciliation maneuver if leaders indicated that a tax-reform plan was ripe.
That said, a relative, new optimism for wrestling with seemingly intractable issues is gripping Washington. Such was the case when Republicans and Democrats came together to work out a bipartisan deal on the so-called “doc fix.” That’s the expensive and controversial proposition in the Medicare system. The pact staved off what could have been a public-health and actuarial nightmare.
“This tells me there’s a formula there for getting things done, and maybe tax reform,” Ryan said shortly after the House adopted the doc fix replacement in late March.
“It was a good opportunity to work with Ms. Pelosi in a bipartisan way to do the right thing for the country,” said Boehner, speaking about House Minority Leader Rep. Nancy Pelosi, D-Calif. “The window’s never closed.”
And so congressional observers are watching the budget to see what sort of options for reconciliation wind up in the final package. Will there be the possibility of a big, fat, fastball, grooved right down the middle of the plate for tax reform? Or will lawmakers revert to the Rembrandt status of Kershaw and Cueto, merely painting the corners.