By Bernie Becker - 09/08/11 12:25 AM EDT
Senate Finance Committee Chairman Max Baucus (D-Mont.) has scheduled a series of hearings this month on taxes, sending a reminder that congressional tax-writing committees, and not the new debt supercommittee, could have the final say when it comes to tax reform.
Officials from both parties are pushing the 12 lawmakers on the special deficit-reduction panel to take a deep look at the tax code in the coming weeks as they try to find a at least $1.2 trillion in deficit cuts.
Camp and Baucus have also vowed to work together in their efforts to overhaul the tax code, and both made tax reform a priority before being tapped to serve on the supercommittee. The two chairmen have already held regular hearings on the issue during the current Congress.
Finance is set to restart its examination of tax reform with a Thursday hearing on international tax reform issues. In addition to that hearing, the full committee is scheduled to discuss taxes twice more next week, with a subcommittee adding a third hearing to the docket.
“There is no doubt that the Senate Finance Committee is marking its territory,” one K Street source told The Hill.
Baucus told reporters Wednesday that the supercommittee would definitely discuss tax reform, and his staff has suggested the Finance Committee’s work could allow it to help the supercommittee. A recently issued Finance advisory explicitly said Thursday’s hearing would help the committee formulate possible recommendations for the deficit-reduction panel.
“The subject will come up,” Baucus said. “We’ll deal with it in an appropriate way.”
On the other side of the Rotunda, a Ways and Means spokeswoman signaled that the chairman was not concerned about guarding his turf, in large part because he also sat on the supercommittee.
“He will have a voice in all the discussions,” the spokeswoman said.
Some tax experts think Baucus and Camp have nothing to worry about.
Given differences between the two parties over taxes — not to mention some skepticism around Washington about the supercommittee’s ability to meet its mandate —observers doubt whether Camp and Baucus need to guard their turf.
“They’re not going to be able to do tax reform,” Sen. Orrin Hatch (R-Utah) said about the supercommittee, saying it would be “a mess” if they even tried.
“That’s a big, big undertaking. It took years to get the 1986 bill through,” Hatch, the ranking Finance member, added, referring to the last successful overhaul of the tax code. “It’s a lot harder than you think.”
Kenneth Kies, a top tax lobbyist and a Ways and Means staffer during the 1980s tax-reform push, concurred, saying that the idea the panel could do a full-scale overhaul of the tax code “reflects a view of people that have never done a tax reform bill.”
“The supercommittee’s principal job is so difficult that if they worked 24/7 to get to $1.2 trillion — that would be hard enough,” Kies said, referring to the amount of deficit cuts the supercommittee is tasked with finding.
With that in mind, budget analysts are increasingly calling on the supercommittee to implement a two-step process for tax reform — perhaps accelerating the process and setting parameters themselves before placing a deadline for Finance and Ways and Means to hash out the details.
“I don’t think anyone has ever argued you can do the entire tax reform legislation in a matter of months,” said Sen. Ron Wyden (D-Ore.), a Finance Committee member and a longtime proponent of fundamental tax reform. “But certainly you can start it down the road.”
Supercommittee Democrats such as Sen. John Kerry of Massachusetts and Rep. Chris Van Hollen of Maryland are also signaling that the supercommittee will examine the tax code, perhaps by taking a look at tax credits and deductions used by the oil-and-gas industry and other provisions that Democrats have sounded off on in recent months.
Kerry told reporters on Wednesday that the supercommittee would look at a number of options when it comes to taxes.
“I think it’s very difficult to see how you’re going to do the job without some consideration there,” said Kerry, also a Finance Committee member. “I think the committee ought to have broad scope in what it’s going to consider, and that’s part of what we’re discussing now.”
Still, Eugene Steuerle of The Urban Institute, a veteran of the 1986 tax reform process, also said that any repeat of the last tax overhaul would need to involve the tax-writing committees, if for no other reason than technical knowledge.
“This can’t all be resolved through broad debate,” said Steuerle, a Treasury official under President Reagan. “A lot of this needs to be hammered out in back rooms, just to make sure all the numbers add up together.”
Wyden also noted that, if the supercommittee did set a deadline for tax reform, lawmakers would not have to start from scratch, given the work already done on the issue during the George W. Bush administration and by President Obama’s fiscal commission.
“It is not like healthcare, where nobody’s ever done it before,” the Oregon Democrat said.