Members of the House ways and means committee will play a large role in tax reform
As will moderate Democrats in states President Donald Trump won last year
Washington is gearing up for a busy fall loaded with a number of fiscal issues, perhaps the most mammoth of which is comprehensive tax reform.
Leaders from both the White House and Congress have been working quietly for months on the topic. While the White House is eager to get a bill passed by the end of the year, members of Congress have not been so enthusiastic about the timeline.
After all, the last time Congress passed comprehensive tax reform was in 1986 – and that was a feat that took years.
From the White House, Treasury Secretary Steven Mnuchin will get perhaps the most visible role thus far of his tenure when he acts as a top negotiator for the Trump administration in tax reform. Presidential adviser Gary Cohn and Mnuchin released a one-page blueprint of its tax reform proposals back in April. Among the priorities were consolidating the number of tax brackets down to three from seven, doubling the standard deduction, and lowering the corporate tax to 15%, far below its current rate of 35%.
While a wide number of people will be involved in the effort, here’s a list of key lawmakers that will likely come up a lot over the next few months.
House ways and means committee: Brady, Neal
The Constitution says that “all bills for raising revenue shall originate in the House of Representatives,” which has made the House the starting point for tax and spending legislation in the past. The tax-writing committee in the House is the ways and means committee, a powerful group that also played a high-profile role in the passage of the health care bill in the House earlier this year (though it went nowhere in the Senate.)
Rep. Kevin Brady, chairman of the committee, has served on it for almost two decades and helped develop and introduce that House Republican blueprint on tax reform that was released last year. And as a former Chamber of Commerce executive, the Republican from Texas had experience seeing how tax policy affects business. Teeing up the fall season of tax reform, he’ll be giving a speech on tax reform next week at the Ronald Reagan Center in California.
Also high ranking is the top Democrat on the committee, Rep. Richard Neal of Massachusetts, who’s in his 25th year on ways and means. Before becoming the ranking member, he was the top Democrat on the tax policy subcommittee. Largely considered a moderate, Neal is pushing for Democrats to be more involved.
While Democrats have little power against the Republican majorities in both houses, they still play a vocal part in outlining areas of debate. Plus tax reform is widely seen as a topic that could have some more bipartisan support than health care, so Republicans might be eager to win over some Democrats, especially those who represent states or districts that Trump won.
Senate Finance Committee: Hatch, Wyden
As the chairman of the Senate finance committee, a panel which oversees 50% of the federal budget, Sen. Orrin Hatch of Utah is one of the most powerful members of the Senate. Not to mention he’s the longest-serving Republican in the current Senate, having been elected to the office in 1976. He lead efforts to establish permanent tax cuts that were signed into law 2015.
Sen. Ron Wyden, D-Oregon, is the top Democrat on finance and a long-serving senator. He co-authored his own tax reform bill with Republicans before, once in 2010 with then-Sen. Judd Gregg and again later with then-Sen. Dan Coats. Wyden is widely known as a deal-maker who’s willing to work across the aisle, and he’s eager for Democrats to have more buy-in on the drafting of tax reform than they had in the health care bill.
Republican leaders: Ryan, McConnell
Once the bills clear the committees, the leaders of the House and Senate will have big say in what happens next on the floor.
House Speaker Paul Ryan, a former chairman of ways and means himself, has been actively involved in tax legislation while in Congress. The noted policy wonk has been optimistic for months that tax reform can be accomplished this year, and after the Senate failed to pass health care legislation last month, he was one of the first leaders to say it was time to move on to tax reform.
He will also be a key negotiator over potential intraparty divides that are likely to pop up between the conservative and moderate wings of the party, especially over the best ways to raise money for tax cuts.
Senate Majority Leader Mitch McConnell will have that same job of overseeing rifts between his party on policy and deciding how to best maneuver the bill on the Senate floor. He has already announced that the Senate will proceed with tax reform using budget reconciliation, a move that would allow them to pass tax reform with a 51-vote majority and without any help from Democrats – as long as all but two Republicans get on board.
That strategy didn’t work so well with health care, when three Republicans defected on the “skinny” bill to repeal and replace the Affordable Care Act. But McConnell argued last week that Democrats have shown no interest in addressing “most of the principles that would get the country growing again” and said Republicans will have to go at it alone.
“So, I don’t think this is going to be 1986 when you had a bipartisan effort to scrub the code,” he said. “Maybe there will be a few (Democrats).”
(It’s also worth noting that Senate Majority Whip John Cornyn, the No. 2 Republican in the Senate, is on the finance committee and will be involved in that markup and approval of the bill in its initial stages.)
Democratic leaders: Pelosi, Schumer
Again, since they’re in the minority, Democrats don’t have much power to stop tax reform, though they have some procedural tools to slow it down. House Minority Leader Nancy Pelosi and Senate Minority Leader Chuck Schumer will largely serve as the key spokespeople delivering their party’s messaging against Republicans, should things turn into a fight, as they often do.
Schumer led most of his caucus in a letter to Republican leadership last week that said Democrats will not support any kind of reform that benefits the top 1% of earners, adds to the deficit, or goes through the legislative process without Democratic input through hearings.
“Donald Trump campaigned as a populist, for God’s sake. It’s a different world than it was 10 or 15 years ago. The idea that people will support huge tax cuts for the rich when they’re given a crumb won’t work anymore,” Schumer told CNN’s Lauren Fox on Wednesday.
For her part, Pelosi has been criticizing Republicans for not inviting Democrats to the table this year in drafting tax reform policies and have been painting their efforts as a tactic to hand out massive tax cuts to big corporations and the wealthy, as she said in a statement last month.
Democrats from states that Trump won
Since intra-party debates could result in the defection of some Republicans (as it did in health care), picking up even one Democratic vote could make all the difference.
That’s why all eyes will be on these three Democrats: Sen. Joe Manchin of West Virginia, Sen. Heidi Heitkamp of North Dakota and Sen. Joe Donnelly of Indiana.
All three are moderates up for re-election in states that Trump won easily last year, and none of them signed the letter with the rest of their caucus to GOP leadership. The absence of their signatures suggests they are open to working with Republicans in a significant way.
They’ve already been targets in digital ads from Freedom Partners, a conservative group that’s trying to push Democrats from red or purple states to side with Republicans on the issue.
While Manchin agrees with the components of the Democratic letter, he told the Charleston Gazette-Mail last week that he wouldn’t agree to sign it without first seeing Democrats and Republicans trying to work together. Donnelly’s office has also publicly stated that he wants to see a bipartisan process for tax reform.
Heitkamp, the former tax commissioner in North Dakota, has said previously that she’s willing to work across the aisle on tax reform but that any reform “must support working families, grow the economy, and help create American jobs.”