Tax reform: Starting place for jobs, growth
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If there was one broad issue that both Democrats and Republicans agreed on during this year’s divisive election, it is the necessity of tackling the highest priority for the American people:  jobs and economic growth. 

We all can agree that the economic policies of the past are not addressing the anxieties of the future.  The emotions Americans are feeling are rooted in the reality that real income is down while the cost of living is up as indexed to inflation. 

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We should forge a bipartisan accord on investments in our nation to jumpstart job creation. What is required are strategies to sustain economic development and expand economic opportunity for all Americans.

An optimal place to begin is where the two sides have already indicated a desire for action:  tax reform that allows our companies to compete more strongly in the global marketplace.

That is why the four of us decided to co-chair the Bipartisan Policy Center’s American Competitiveness and Job Creation Tax Initiative, so that we can find ways in which the tax code can more effectively drive economic growth and employment. 

With the new Congress, Republicans will now control the White House and both houses of Congress. There has been discussion of possibly using a budgetary mechanism, little known outside Washington, called “reconciliation” to implement tax reform.  This method would allow the majority to bypass the 60 votes typically necessary to forestall filibusters and pass major legislation in the Senate. 

While this mechanism has been used many times in the past by both political parties, and is a legitimate exercise of political power, we believe the preferable path to enacting meaningful and effective tax reform is through regular order in the Senate.

Maintaining the 60-vote threshold in the Senate is critical to forging compromise and coalition-building which not only produces better legislation – as the best ideas from both sides are considered – but also reflects the unique function and character envisioned for the institution by the Founding Fathers.

Passing tax reform under regular order would also provide the certainty employers require to make the kind of long-term investments necessary for strong and sustained job growth by ensuring that the policy changes enacted will be permanent.  By contrast, using the expedited budget reconciliation process could force some of the reforms to sunset at a specific time in the future.  

Counterintuitive as it may seem in the current, polarized atmosphere, there is at least some measure of hope for bipartisan action.  

Both House Speaker Paul RyanPaul Davis RyanHenry Kissinger, Tim Cook among guests at White House state dinner Overnight Finance: Stocks fall hard | Trump sending delegation to China for trade talks | SEC fines Yahoo M over breach | Dodd-Frank rollback dominates banking conference To keep control of House, GOP must have McCarthy as next Speaker MORE (R-Wis.) and Democratic Sen. Charles SchumerCharles (Chuck) Ellis SchumerCan Mueller be more honest than his colleagues? Throwing some cold water on all of the Korean summit optimism House Republicans push Mulvaney, Trump to rescind Gateway funds MORE, who will become Senate minority leader, reportedly want an overhaul of our international tax system.  House Ways and Means Chairman Kevin BradyKevin Patrick BradyFormer Bush adviser joining Ways and Means Committee in key staff role Some doubt McCarthy or Scalise will ever lead House GOP House passes series of bills to improve IRS MORE (R-Texas) has expressed his desire to pass reform through the process of regular order, as has Senate Finance Committee Chairman Orrin HatchOrrin Grant HatchSenators debate new business deduction, debt in tax law hearing Romney sits courtside for NBA playoffs, heckles star Trump struggles to get new IRS team in place MORE (R-Utah) who has offered the view: “I don’t think it can be done except in a bipartisan way.” 

Other Republican senators have also suggested that the legislation needs bipartisan support to establish it as long-term policy.  Citing the Affordable Care Act as an example, Senate Majority Whip John CornynJohn CornynRand's reversal advances Pompeo Joe Scarborough predicts Trump won't run in 2020 Republicans divided over legislation protecting Mueller MORE (R-Texas) remarked recently that “if you do things purely on the party line, then it’s unsustainable.”  Majority Leader Mitch McConnellAddison (Mitch) Mitchell McConnellOvernight Defense: VA nominee on the ropes | White House signals it will fight for pick | Trump talks Syria with Macron | McConnell tees up Pompeo vote Schumer to oppose Pompeo as secretary of State Trump's nominee for the VA is on the ropes MORE (R-Ky.) has often espoused the importance of regular order to the institution of the Senate.

So where exactly might compromise begin?  We are not prescribing any one approach, but we agree that reform should make American companies and workers more competitive, remove the incentive for corporate inversions and promote investment in cutting edge research and development.  In addition, tax reform could create an opportunity to spark vital investment in infrastructure.  For example, the incoming administration has signaled a willingness to consider using revenue from international tax reform as a source of infrastructure financing. 

Modernizing our infrastructure in tandem with policies such as a more competitive corporate tax rate will expand our economy and improve opportunities for American employers and workers.  These measures could be further paired with changes to the tax code that would benefit lower- and middle-income individuals, in a framework that could represent a “win-win” for everyone. 

We know the task will not be easy.  There will be fundamental challenges between near-term growth and fiscal responsibility that demand we not add to our long-term debt load and ensure we avoid shifting the tax burden to future generations. It is also inevitable that forces on both ends of the political spectrum will ardently, and mistakenly, equate collaboration with a capitulation of principles.

The question becomes whether people of good will from both sides of the aisle will transcend their differences and restore collective faith in the ability of our elected officials to govern and legislate on issues that go to the heart of economic security.  For the sake of the nation, we hope that is the path they are willing to take.

The authors, former Sens. George Mitchell (D-Maine) and Olympia Snowe (R-Maine); former Reps. Jim McCrery (R-La.), and Earl Pomeroy (D-N.D.), are co-chairs of the Bipartisan Policy Center’s American Competitiveness and Job Creation Tax Initiative.


The views expressed by authors are their own and not the views of The Hill.