House GOP eyes permanent tax cuts

House Republicans are plotting how to add a string of permanent tax cuts to a package that would simultaneously pour billions of dollars into the Highway Trust Fund and revamp international tax rules for business.


GOP lawmakers have been seeking for years to extend for good some of the dozens of tax breaks that routinely expire every year or two. They came close last November, before President Obama and a group of congressional Democrats scuttled an emerging deal between then-House Ways and Means Chairman Dave Camp (R-Mich.) and then-Senate Majority Leader Harry Reid (D-Nev.).


Rep. Dave Reichert (R-Wash.) said this week that House Ways and Means Chairman Paul Ryan (R-Wis.) was eyeing the highway bill as a potential vehicle, given that lawmakers have to act by the end of October.


The tax breaks, commonly known as extenders, expired at the end of 2014 and are expected to get restored in some manner by the conclusion of this year.


"Our plan is to include extenders in a six-year bill on the House side," Reichert, the chairman of a Ways and Means subcommittee on taxes, said Thursday. "But the problem is, we've got to negotiate with the Senate."


Reichert said he believed that the House would push to get a full six-year highway bill done by mid-October, to give them time to reconcile the measure with the Senate. The Senate passed its own six-year highway plan, with three years of funding, before lawmakers left Washington for the August recess.


But Ryan and his House tax writers face plenty of obstacles if they're trying to meet that aggressive timeline with a full bill to tax current offshore profits for roads, shield future profits from U.S. taxation and give new incentives to income stemming from innovation. The Highway Trust Fund likely has enough money to last for months past the Oct. 29 deadline, and lawmakers could decide to pass another short-term extension to push the issue into December.


For the time being, House Republicans are working to craft their own combination highway-tax plan - increasing the chances that Democrats won't get on board with the GOP plan.


Many congressional Democrats and President Obama continue to oppose permanent extensions of the expired tax breaks, which include popular incentives for business research, charitable giving and for business investment, calling the idea fiscally irresponsible. And it's tough to say what House Speaker John Boehner's (R-Ohio) surprise resignation on Friday will mean for a host of important policy issues.


On top of that, Senate Majority Leader Mitch McConnell has sounded nothing but skeptical about the House's efforts to craft a tax overhaul that also provides funding for highways, and has long believed that Republicans are unlikely to get any tax reform deal to their liking in tandem with this White House. McConnell instead wants the House to accept the Senate highway plan, which has bipartisan opposition across the Capitol.


Rep. Kevin Brady (Texas), another senior Republican on the Ways and Means Committee, said there was still plenty of work that needed to be done to get a House highway deal together. "Everything's a negotiation," Brady said after a committee Republicans gathered on Thursday. "All of it's still in discussions."


The House Ways and Means Committee has already passed more than a dozen of the expired incentives for good this year, with the full House taking up six of them.


But if the tax breaks can't be taken care of as part of a broader deal, Republicans could struggle to overcome another likely veto threat from Obama.


Senate Finance Chairman Orrin Hatch (R-Utah), whose committee cleared a two-year extension of the expired tax breaks this summer, has said he's interested in passing some of the incentives permanently. Reichert and other Republicans have also said that the potential Reid-Camp deal from last year could be a template for a deal this year.


But GOP lawmakers have also struggled to come up with a way they can get Obama and other Democrats to go along with the sort of plan they rejected not even a year ago.


"With the economy still struggling, and with all he wants to do in his final months, I would hope he would take a second look," Brady said.

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