GOP Tax-Reform Balloon Is Starting to Deflate

Lofty aspirations for a landmark tax-code rewrite this year appeared to lose their altitude on Thursday, when a closed-door meeting between the top tax writer in the House and other GOP leaders failed to produce assurances it will happen.

Ways and Means Committee Chairman Dave Camp, R-Mich., had been guaranteeing that his panel would write, mark up, and pass comprehensive tax-reform legislation in 2013, saying as far back as last fall that this would occur "no matter what."

Just weeks after Camp made that pledge, Speaker John Boehner, R-Ohio, also described it as the House's top priority, reserving H.R. 1 as the bill number for tax reform.

But following Thursday's meeting, Camp emerged with less certainty, noting that "no final decisions" were made on when the bill will be allowed to move to the floor. Camp wouldn't comment on whether he still plans to release a draft — or even attempt to mark up legislation — before the end of the year.

A closed-door meeting between Camp; Boehner; House Majority Whip Kevin McCarthy, R-Calif.; Budget Committee Chairman Paul Ryan, R-Wis.; and other top House GOP officials did not officially lead to a pronouncement that Camp's tax plan is dead for 2013.

"But read between the lines," said a Republican member of the Ways and Means Committee who asked not to be identified.

The lawmaker noted that aside from the lack of a statement promising action, the fact is that House members have just 13 scheduled days left in Washington this year.

"I'm going to continue to move ahead on the bill and continue to refine it," Camp said, adding that he is open to bringing up the bill in 2014, an election year, as well. "Timing is important. So, those discussions are going to be ongoing," he said.

Camp and other Republicans have noted distractions that have pushed his timetable back. For instance, Republicans have spent the last two months fighting other fiscal battles — including a stalemate over a continuing resolution that ultimately led to the government shutdown — taking key legislative days away from tax reform and other priorities. Now there is also a reluctance to press ahead as Republicans don't want to lose the traction they've gained in their critical messaging against the Affordable Care Act.

"You've got the CR that pushed us back, you've got the debt ceiling that pushed us back, the government closure that pushed us back, [and] the budget conference is happening — their deadline is December 13," Rep. Dave Reichert, R-Wash., a member of the Ways and Means Committee, said Thursday. "Do we want to mark that bill up before the 13th of December now? Do we want to wait until after? ... They could tell us they want us to be here through Christmas for all I know."

The apparent delay is a major setback for Camp, pushing back a project he has worked on since becoming the Ways and Means chairman in 2011. Over the past several months, he and Senate Finance Committee Chairman Max Baucus, D-Mont., have been busy traveling the country together to whip up support for comprehensive tax reform.

And if a reform plan is not introduced next year, there is a chance Camp would completely lose his hold on the process. Under House Republican rules, he is term-limited as chairman at the end of next year. Assuming he wins reelection, he would need a waiver to keep the gavel, which has been a rare practice.

Officially, the word from Camp and other House Republican leaders is that the question should not be so much whether tax reform will occur, but when.

Reichert said there are rumors that the House would push back its Christmas holiday by a week, ending its session the week of Dec. 16, when the Senate is also in session, rather than on Dec. 12, in order to give the body time to consider a potential budget deal and other legislative efforts. But with so little time left on the calendar, tax reform is likely to be pushed into 2014.

Even then, pushing a tax-reform fight into the midterm elections could be problematic. Republicans are hoping to use the current furor over issues with the Affordable Care Act to help maintain their majority in the House and potentially pick up seats in the Senate as well. Some worry that tax-reform efforts could overshadow that messaging and put vulnerable Republicans on defense over their party's new tax plan.

Redoing the individual tax code also means deals will have to be struck on tough reform issues, such as what to do with popular deductions for mortgage interest or charitable contributions. All of this will require more compromise than might be possible between two parties in the midst of ongoing budget negotiations — and in an election year, as well.

"Democrats have got major issues with Obamacare, and adding tax increases to middle-class folks would not help," said one lobbyist. Republicans "want to keep the focus on Obamacare and not do anything to shift focus. Backing a tax reform bill would shift focus."

Before heading into his meeting with Boehner and other leaders Thursday, Camp said that an election-year fight doesn't concern him, noting that the Tax Reform Act of 1986 was also passed in a midterm-election year. "So yeah, it's possible. Welfare reform was done in an even-numbered year. Lots of things have been done in election years," he said.

Rep. Sander Levin of Michigan, the top Democrat on the Ways and Means Committee, also did not rule out that tax reform could happen in 2014. "I think it makes it more difficult," he said, but added, "This place has turned out to be unpredictable."

In the Senate, Baucus had scheduled a closed-door meeting with Finance Committee members for Thursday to discuss and update tax-reform efforts in that chamber. But the meeting was postponed until Tuesday.

"Senator Baucus wants to take some additional time to talk to members and hear the concerns expressed by some before deciding on a path forward," said Baucus spokesman Sean Neary.