Congress has barely settled down for its new session, but already there is concern that time for tax reform is running out. On an issue that touches as many potent interests as a major tax overhaul, every minute in a congressional session counts. Still, quiet progress is being made on several fronts, and a major push in both houses this summer just might produce final action early next year.
The Reagan administration has certainly lost valuable momentum by declining to send a reform package to Congress until next month. Nor are prospects enhanced by Senate Finance Committee Chairman Bob Packwood's expressed preference for using the tax code as a vehicle to influence social and economic policy rather than as a relatively neutral device for raising needed rvenues -- a preference certainly shared by the committee's ranking minority member, Sen. Russell Long.
But tax reform has found a strong champion in House Ways and Means Committee Chairman Dan Rostenkowski, who has already held preliminary hearings on reform, sounded out other congressmen on both the politics and substance of tax reform, planned meetings with interest groups and, last week, staged an unusual meeting with Republican committee members and Treasury Secretary James Baker. This sort of bipartisan consensus- building could strengthen both the committee's and the administration's hands before full-fledged hearings are held, ideally early this summer.
Meanwhile, Democrats in the Senate -- who include such long-time advocates of reform as Sen. Bill Bradley -- are planning to put pressure on the Republican Senate leadership to start moving on tax reform. If the administration presses the matter, it's hard to imagine that Majority Leader Bob Dole -- the leading producer of actual tax reform in the last Congress -- would not press for Senate hearings this summer as well.
As soon as either house begins those hearings, business lobbies and other reform opponents can be expected to make a full-court press. No one underestimates the power of the lobbyists who have enhanced both their own careers and those of many members by adding loopholes to the tax code. But this time important parts of the business community -- including such industry leaders as IBM, Procter & Gamble and General Motors -- have weighed in on the side of tax reform, either because they now pay a disproportionate share of taxes or are willing to forgo current tax subsidies for the greater flexibility that a more neutral tax code would allow. If both houses hold hearings this summer, moreover, it will be harder for the lobbies to whittle away at the bill's reforms.
Even if action is not completed by either house this year, Congress could pick up where it left off early next year. An election will be in the offing, but the conventional wisdom about Congress' inabilan election year didn't hold true with respect to tax reforms in either 1982 or 1984. With enough support from the administration -- and enough progress this year to build upon -- Congress just might be glad to show the electorate that it can deliver a reform that most people think is long overdue.