Domestic Taxes

Scorekeeper tells Republicans that their numbers don’t add up

House Republicans have run into another roadblock in their efforts to rewrite the U.S. tax code — Congress’s official tax scorekeeper.

Ways and Means Committee Chairman Dave Camp (R-Mich.) has promised for months to push a broad tax reform bill through his committee this year, and GOP tax writers have insisted that they’ll release a bill only after they’ve gotten the policy right. 

But with just weeks left in 2013, lawmakers and lobbyists say the official projections from the Joint Committee on Taxation (JCT) have not made Ways and Means’s job any easier.

{mosads}For instance, Rep. Charles Boustany (R-La.), a senior Ways and Means member, called it fair to say that the JCT scores have not been as optimistic as Republicans might have hoped. 

One K Street hand added that the projections on a tax code that touches everything from people’s healthcare to their housing were “not giving the committee any room to get the rates down to where they’d like without gutting everything.”

“Everything is always tough when you’re dealing with numbers out in the future,” Rep. Devin Nunes (R-Calif.), another senior tax writer, told The Hill last week.

“You get 10 economists in the room — you have 20 different opinions. Joint Tax does its best, and we’ve got to work through it and see what we can come up with.”

Camp has kept those JCT projections close to the vest, and continues to express confidence that a mark-up will happen this year.

But with a House-Senate budget conference expected to take up much of the oxygen on Capitol Hill over the next month, the unfavorable scores have given skeptics another reason to doubt whether Camp and Senate Finance Chairman Max Baucus (D-Mont.) can get tax reform across the finish line before the end of 2014.

Some tax lobbyists have also pointed at the late date, and to Camp’s own statements on when he would roll a bill out, as proof that the committee was having trouble making the math work.

That comes as there is increased speculation on and off Capitol Hill that Camp will roll out a product soon, fed in part by the fact that the House is scheduled to be in Washington only four more weeks this year — two each in November and December.

“The rumor was that they were going to introduce in July. Now the rumor is November. Before that, we heard October,” one lobbyist said.

“The committee was struggling to get the numbers to add up and it is my expectation they will move the bill when they are ready.”

Ways and Means Republicans remain on board with Camp’s timeline, with some tax writers saying suggestions that JCT scores are hindering the process were overblown.

“There is no disputing that tax reform is an ‘all hands on deck’ endeavor, and the chairman is appreciative of the effort and dedication that JCT has put into achieving that goal,” Michelle Dimarob, a spokeswoman for Camp, said in a statement.

Rep. Diane Black (R-Tenn.) suggested that the bigger issue for the panel when it comes to JCT has been how long it takes to get projections from the tax committee. 

Republicans have long complained that JCT scores don’t always fully take into account how much of a spark tax reform would give to the economy, though the tax committee is giving Ways and Means both so-called “dynamic” and “static” scores.

But members on both sides of the aisle also acknowledge that revenue projections are complicated, with a change in one area of the tax code causing a ripple effect elsewhere.

“I don’t know of any score that we’ve gotten that would say, ‘Oh, gosh, this is a stopper,’ ” Black said. “It’s a work in progress, and you’re going to get something back and you’re going to say, ‘Well, maybe we need to adjust it here, maybe we need to adjust it there.’ ”

One tax lobbyist added it was “entirely believable” the JCT scores were making it harder for Camp to craft his tax overhaul. But the lobbyist cautioned that it was also likely that only Camp and his inner circle really knew how challenging the numbers were.

“It’s an age-old problem that people think revenue projections are a lot simpler than it really is,” the lobbyist said.

To be sure, tax writers and lobbyists have long known how challenging it would be to scrap or modify tax breaks in exchange for lower rates, the sort of overhaul that both Camp and Baucus are seeking.

Camp has called for reducing both the top individual and corporate rate to 25 percent — from the current 39.6 percent and 35 percent, respectively — without adding to the deficit or shifting more of the tax burden away from the highest earners.

To skeptics, one of the problems reform advocates have is that the more costly tax breaks that can help pay for lower rates are often quite popular — such as the deductions for mortgage interest and charitable contributions. 

On top of that, Rep. Sandy Levin (Mich.), the top Democrat at Ways and Means, released JCT projections this summer that said something resembling Camp’s plan would have to cut around $5 trillion in tax breaks to avoid piling on to the deficit.

Levin and Ways and Means Democrats have also complained that Republicans have effectively shut them out of the process in recent months.

“I think it would just be better for the world if there were more congressional plans that elucidated some of those mathematical issues and some of those tradeoffs and were actually scored by the Joint Committee on Taxation as opposed to having this conversation over and over again in a vacuum,” Jason Furman, the chairman of President Obama’s Council of Economic Advisers, told reporters this week.


Tags Dave Camp Dave Camp Max Baucus Montana Person Career Presidency of Barack Obama
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