Lobbyists cheer plan to jam Dems by linking debt hike to tax reform

Greg Nash

Tax lobbyists are cheering the House Republican plan to jam Democrats on tax reform, viewing it as perhaps their last chance for success this year.

K Street insiders say the move by House Ways and Means Committee Chairman Dave Camp (R-Mich.) to include tax reform deadlines in a debt-ceiling bill could be the game-changer they need to get legislation moving in Congress.

ADVERTISEMENT
“We could talk tax reform to death,” said John Guzik, a founding partner at Franklin Partnership. “This forces both chambers to act.”

There’s no guarantee that Camp’s gambit will succeed, as Democrats are insistent that they will not accept any debt-ceiling legislation that isn’t “clean” of other provisions.

But with an election year just months away, lobbyists are hopeful that a “fast-track” process for tax reform could rouse lawmakers to action.

“They don’t work in the Capitol without a deadline,” said Guzik, who served as chief of staff to Camp for a decade. “I know there are a lot of people who would prefer the Ways and Means Committee to move expeditiously to get tax reform done.” 

Camp and Sen. Max Baucus (D-Mont.), chairman of the Finance Committee, have been plugging away at tax reform legislation this year, even going on a road show to try and generate public support.

But many in Washington remain skeptical that the arduous process of weeding out tax breaks to lower corporate and individual tax rates is possible.

The parties are miles apart on the key question of whether tax reform should bring in more revenue to the government. While Democrats say any reform effort should generate $1 trillion in new revenues, Republicans want all the savings from ending tax breaks to be used for lower rates.

And while business groups and companies say they support lowering rates, they are also spending millions of dollars to keep their favored tax credits off the guillotine. 

Russ Sullivan, a recently departed Senate Finance Committee senior aide, said attaching a tax reform fast-track provision to the debt-ceiling legislation would change the dynamic.

While Senate Democrats may be wary, “those who want tax reform to happen should encourage it,” said Sullivan, who worked primarily with Baucus and is now a senior adviser at McGuire Woods Consulting.

Another Democratic tax lobbyist agreed that Camp’s maneuver could work.

“Trying to include fast track for tax reform does help the process by providing a high-profile public discussion of the need for tax reform,” said the Democratic tax lobbyist. 

The enthusiasm for a “trigger” process is a far cry from earlier this year, when lobbyists were clamoring for lawmakers to abandon crisis legislating and return to the “regular order” of hearings and markups. 

But the return to normalcy has meant a return to gridlock, exasperating lobbyists and lawmakers alike.

Sen. Ben Cardin (D-Md.) said last week that he did not think that a tax overhaul could happen outside of a broader budget agreement — and even that outcome struck him as a long shot.

“The policy issues aren’t that complicated, but the political hurdle of sitting down one-on-one around the table and working out an agreement — it’s not easy,” Cardin said at an event sponsored by The Hill.

But Camp’s push could be thwarted by the lobbying efforts of business groups like the U.S. Chamber of Commerce that want the debt ceiling raised without conditions or delay.

National Association of Manufacturers President and CEO Jay Timmons told The Hill’s reporters and editors on Friday that his group wants a “clean” debt-ceiling increase.

“It needs to be clean. Let’s just put that on the table,” Timmons said. 

Others are pessimistic that even a trigger process would be enough to save tax reform.

“Tax reform is on life support and some procedural gimmick is not going to revive it,” said one tax lobbyist. “There is an irreconcilable difference between Obama and the Republicans on the revenue question. Until that is resolved, this is going nowhere.”

Republican aides to Ways and Means have said Camp’s debt-ceiling provision could echo legislation that passed in the summer of 2012.

That bill set a timeline for congressional action, and put forward the House GOP objective of lowering the top corporate and individual rates to 25 percent. The bill didn’t outline what tax breaks should be scrapped, however, and failed to move in the Senate.

Nevertheless, Micah Green, co-chairman of Patton Boggs’s financial services and tax practice, said Camp’s push on the debt-ceiling bill is a major development.

“Just the act of a powerful chairman dropping a proposal for comprehensive tax reform into a bill has to be taken seriously and will start a discussion and a significant lobbying effort. The winners will rejoice and the losers will start to lobby,” Green said. 

“If [Camp] wants to push the issue of tax reform, this is a great way of putting the process out there.”

Jade West, senior vice president of government relations for the National Association of Wholesaler-Distributors, said it would be useful to have lawmakers vote to move on the process. 

“It would be encouraging to have the whole House on the record in supporting tax reform,” West said. “Based how mandatory the language sounds, that will make the timeline much more interesting.”

But the real action of tax reform remains at the committee level, lobbyists say.

“The debt limit is important for a number of reasons, but I’m much more focused on the House Ways and Means Committee because they are expected to produce paper in the next few weeks,” West said. “That is far more substantive than a timeline for the process included with the debt limit.

Bernie Becker contributed.

More in Finance

Business leaders cheer 'positive step forward'

Read more »