House Ways and Means Committee chairman Dave Camp (R-Mich.) said Thursday that he has two goals with respect to the tax code: “One, block massive, job-killing tax increases” at the end of the year, when the George W. Bush-era tax cuts are set to expire. “And two, enact — not just pass — comprehensive tax reform.”
“There is strong support to use the expiration of the [Bush tax cuts] as leverage to force action in 2013 on comprehensive tax reform,” Camp told the Federal Policy Group’s annual tax seminar. “How? Simple: In addition to extending current low-tax policies originally enacted in 2001 and 2003, we should enact fast-track procedures to compel comprehensive tax reform next year.”
Camp said he is mulling what form those procedures might take. He and House Speaker John A. Boehner (R-Ohio), who endorsed the idea this week, made comparisons to the process by which lawmakers adopt trade agreements negotiated with other nations. Under that system, Congress has 90 days to reject or approve a pact in its entirety without amendment.
Overhauling the tax code is certain to be more complicated than approving a trade agreement, however. And although Camp said he hopes to identify options for fast-tracking by August, he acknowledged that it is likely to take longer to find a procedure that can win the support of both the Democratic-controlled Senate and President Obama.
Creating a trigger to force congressional action has been a central sticking point in numerous recent negotiations over the national debt, including talks led last spring by Vice President Biden, sessions last summer between Boehner and Obama, and efforts by a congressional supercommittee last fall.
In each case, the two sides failed to reach agreement. Although key senators are also eager to get on with a tax overhaul, a senior Democratic aide on Thursday dismissed the call for a “fast-track” procedure as a ruse to justify another temporary extension of the Bush-era tax cuts.
Senate Democrats say they are more inclined to let all the Bush tax cuts expire Dec. 31, leaving the wealthiest households to face higher rates while Democrats pursue fresh tax breaks for middle-class families in early 2013. Republicans want to extend the tax cuts for all households, including the wealthy, while they undertake a review of the code aimed at wiping out expensive tax breaks and lowering the top rate to 25 percent from the current 35 percent.
Whatever happens Dec. 31, a senior GOP aide said it would be critical to “send a clear signal that 2013 will be the year Congress acts” to fix the code, which is widely reviled as overly complex and inefficient.
“Doing so would send a clear, strong message to the markets, to employers and families that Washington is serious about reforming our tax code and putting us on a path to sustained economic growth,” Camp said.