Have no worry Republican presidential candidates – you won’t need to come up with a tax platform for the general election.
Paul Ryan is working on that for the whole party.
The House Ways and Means Committee chairman and former vice presidential nominee is working with his colleagues to write a proposal he says will show voters ahead of the 2016 presidential and congressional elections exactly how a Republican controlled White House and Congress would deal with one of Washington’s thorniest political and policy issues: rewriting the tax code.
“Our nominee will arrive in May or June of 2016,” Ryan said in an interview. “If we wait until then when its fever pitch presidential politics, and I’m familiar with that, to tell the people who we are and what we believe in, it will be too late.”
What Ryan isn’t saying is when he will release such a proposal or how detailed it will be, other than it would lower rates for businesses and individuals across the board.
What is clear is that despite deciding to forego his own 2016 bid for the White House, Ryan is not ceding any ground when it comes to the role he appears to covet most – serving as Republican’s leading fiscal policy player.
But an attempt to use a proposal to overhaul the tax code to woo voters comes with a serious set of political landmines for both the party and Ryan. Writing a simpler, fairer tax code is the kind of idea that everyone in Washington supports in theory and can easily be sold in stump speeches. But the specifics of tax reform are difficult under even the best political circumstances because cutting rates also means cutting well-loved tax breaks and benefits.
If Ryan and his allies on Ways and Means float a plan that is too detailed, they risk alienating voters and donors ahead of the 2016 election who would see their special tax carve outs eliminated. But if it’s short on specifics, it will come across as big on promises and light on how they would be achieved, making it no different than most other tax reform plans floated in Congress or on the campaign trail.
There is also no guarantee that the eventual nominee will wrap their arms around the proposal, a potentially awkward situation for the party if there is daylight on the issue between its presidential candidate and Ryan, its leading wonk.
Democrats, meanwhile, will be eager to sink their teeth into anything Ryan proposes after whacking him during the 2012 election, when he served as Mitt Romney’s running mate, over his earlier proposal to introduce a subsidy for private health insurance into Medicare.
“If what he’s going to write is what he gave us in 2012 and he sticks to a plan that includes vouchering Medicare and sticks to a plan that would undermine Social Security and tax the rich less then he’ll hand us a big political victory,” said Brad Woodhouse, the former spokesman for the Democratic National Committee during the 2012 election who now runs Correct the Record, a political group formed to back Hillary Clinton’s bid for the Democratic nomination.
Ryan says he’s not working on the tax plan with any eventual nominee in mind and isn’t worried that some hopefuls, including Sen. Marco Rubio (R-Fla.), have already put their own ideas out there.
Recalling the fresh energy of elections past, Ryan said he’s pushing ahead and looking for input from anywhere he can get it.
“I’ve been doing this for 17 years, I’ve run on a national ticket,” he said. “I feel like I’ve learned a lot in the past few years and I think I have a better sense of what’s doable, I always want to push that.”
While declining to offer specifics about what will be in their tax code revamp plan, in interviews Ryan and his allies on the Ways and Means committee laid out the political and policy benefits they see in producing a proposal in the coming months.
For one, it will show the party has a plan to govern that it can execute during the first weeks of a new Republican presidency.
“What we’re talking about is not just a campaign platform,” said Ways and Means Committee member Rep. Pat Tiberi (R-Ohio). “Our task is more about how you can realistically move a tax bill in a more conservative direction that could actually pass the dynamics of the Senate.”
Some members also argued that the party’s 2012 ticket of Romney and Ryan, struggled to convince skeptics of their economic policy proposals because there were not enough details behind them. Even if the nominee doesn’t endorse every part the committee Republicans’ plan, they said, there would be enough to help them convince voters the party is ready to move quickly on the issue if it controls both the White House and Congress.
“You’d probably have the nominee use the concepts and keep the legislation to back it,” committee member Rep. Charles Boustany (R-La.), said in an interview. “That way you don’t get into the situation that Romney got into where there were all kinds of holes in the plan.”
A warm reception during the presidential campaign could also help smooth the waters if Congress actually takes up the overhaul plan, said Doug Holtz-Eakin, president of the conservative American Action Forum and former top campaign adviser to John McCain’s 2008 presidential campaign.
“The best public education happens in a presidential campaign,” Holtz-Eakin said. “You’re always better able to claim a mandate for reform if you campaign on it and get elected.”
But while Ryan may be in the best position to write legislation that he can realistically shepherd through the House, the qualities that make a good bill in the lower chamber don’t necessarily translate on the campaign trail. Warren Payne, Senior Tax and Trade Policy Advisor at Mayer Brown and former policy director for the Ways and Means Committee under then Chairman Dave Camp (R-Mich.), said there’s no guarantee that Ryan can write something that makes it to the top of the ticket.
“It is a question as to whether what the committee develops could be sufficient to bind or significantly influence the candidates,” Payne said.
In the past Ryan has supported cutting rates and reducing the individual side of the tax code down to two brackets of 10 percent and 25 percent. He backed broadening the tax base, cutting tax rates on income multinational companies earn abroad and expanding the Earned Income Tax Credit (EITC) to cover more single workers.
What he left out is how much an individual would have to make to fit into each bracket, how he would broaden the tax base and how he would pay for a costly expansion of the EITC.
Rate cuts in the proposal would be balanced out in part by cutting unspecified tax breaks. The result, he says, will be decades of economic growth.
Budget analysts have long warned that economic growth resulting from tax cuts will likely not be enough to offset the revenue the government would lose from cutting rates, an issue that will be a big part of the debate over any tax reform plan.
Ryan disagrees with this assessment and said he is counting on the projected economic growth to also provide the foundation for future changes to government spending. He has long pushed, for instance, to have the private market play a bigger role in Social Security and Medicare.
For now on tax reform, Ryan isn’t ruling out the possibility of striking a smaller deal with the Obama administration. He and his Senate counterpart, Finance Committee Chairman Orrin Hatch (R-Utah), are discussing options for some limited business tax reforms, including a shift to a territorial system for taxing multinational corporations.
But Ryan’s attention is turning toward his loftier aspirations.
“Right now we’re busy governing, the sort of blocking and tackling because we think we have a window of legislating before we get into deep political and presidential season,” he said. “Then we’re going to focus on our bigger picture plans to try and give our country and our party an agenda to run on.”