Brady heads GOP’s efforts on tax reform, Obamacare overhaul
WASHINGTON — Amid mounting pressure to make good on President Donald Trump’s promises to cut taxes and repeal Obamacare, The Woodland’s Kevin Brady is a man caught in the middle.
With Republicans in full control of Congress and the White House, GOP leaders already face restive conservative supporters who expected to see the Affordable Care Act dismantled in the first days of the Trump presidency, if not on Day One.
At the same time, Republican lawmakers — including Brady — have squared off with testy town hall crowds alarmed at the prospect of losing health insurance gained under former President Barack Obama. The tensions come as GOP
leaders have had to juggle the twin imperatives of tax reform and Obamacare — not just the promised repeal, but replacing it with a new health system developed almost entirely from scratch.
Once seen as a policy wonk mired in the recesses of tax policy, Brady, now in his 20th year in Congress, has become a constant presence on cable news and has reporters following him everywhere. In back-to-back appearances Tuesday before a national business group and a Capitol Hill press conference on GOP priorities, Brady promised to deliver on both tax reform and an Obamacare replacement this year.
Analysts say that will be a tall order. A year ago, Brady was fond of saying that all that was missing was a new president. “Since then,” he said Tuesday, “a lot has happened in a positive way.”
As chairman of the powerful Ways and Means Committee — with significant jurisdiction over taxes, health care and trade — Brady increasingly is being squeezed between competing pressures to overhaul the entire tax system, repeal Obamacare and stave off a potential trade war with Mexico and other major U.S. trading partners.
GOP not backsliding
Amid doubts emanating from secretly recorded discussions at a recent GOP retreat in Philadelphia, Brady made clear Tuesday that his party is not backsliding on the Affordable Care Act.
“We are focused on repealing Obamacare,” he said, “and replacing it with the types of reforms that work for patients, that return control to the states so they can tailor health care to their needs, and restore a free market so Americans just have more choices.”
At the same time, he has become the face of the Republican Party on major tax reform, particularly the House GOP’s “Better Way” plan to lower rates and curb tax breaks. Despite his optimism, the project has been mired in an imbroglio about a socalled border adjustment tax, which is opposed by major retailers and other business groups that rely on imports. The debate only got messier in recent weeks when the Trump administration pitched it as a way to pay for a new border wall, sparking fears of an all-out diplomatic and trade war.
For Brady, 61, the risks are almost as great as the potential rewards.
“Being in leadership is a double-edged sword. You have tremendous power to get things done. But if you don’t, you’ve got a big target on your back,” said University of Houston political scientist Brandon Rottinghaus. “He’s in a unique position to be bombarded from all sides on these issues.”
‘Just lots of crazy’
In conservative activist circles outside Washington, there has been a running debate about whether tax reform — as complicated as it is — should come before or after Obamacare repeal, and whether the repeal should wait on a still unformed replacement plan.
With an upcoming congressional recess, some groups already have warned of Republicans retreating into talk of “repairing” rather than ending Obamacare. Managing expectations, House Speaker Paul Ryan has promised a “step-by-step approach” to a replacement plan.
“Where is the bill that was supposed to be on the president’s desk by Feb. 20?” said Twila Brase, head of Citizens’ Council for Health Freedom, a national group that has been pressing for a full repeal of Obamacare. “Americans were told well before Inauguration Day that a repeal bill would be presented to Donald Trump by next week, yet, we have not heard the details of the bill, nor does it seem as though the bill is progressing as it should.”
Others are demanding speedier action on promised tax cuts. Tweeted Drudge Report founder Matt Drudge: “Republican party should be sued for fraud. NO discussion of tax cuts now. Just lots of crazy. Back to basics, guys!”
Brady and other top Republicans in Congress have promised to get a tax reform bill to Trump in 2017. They also, however, have said their first priority is repealing and replacing Obamacare, which Trump said could slip into next year.
Trump also has hinted that he may get out ahead of the Congress on tax reform, telling a group of business leaders from the Retail Industry Leaders Association on Wednesday that a plan to cut corporate rates is imminent. “We’re doing a massive tax plan that is coming along really well,” he said. “It will be submitted in the not-toodistant future. It will be not only good and simpler, it will be, you’re talking about big numbers of savings.”
Brady said the tax plan being formulated by House Republicans has about an “80 percent” similarity to that of the White House. “I feel very positive about how much common ground there is,” he said.
One potential divergence is over Brady’s 20 percent border tax, which Trump has called “too complicated,” based as it is on how companies deduct the costs of goods sold overseas versus inside the U.S. Some Senate Republicans, including Texas’ John Cornyn, have raised doubts about the import tax, which critics say could hurt consumers. As the tax is expected to help offset planned reductions in corporate tax rates, the clash could jeopardize the entire House GOP tax reform scheme.
The European Union also has threatened to bring a massive case against the United States before the World Trade Organization.
Brady said he is undeterred.
“As predicted, we expect other countries to challenge this provision, because they have a pretty sweet deal right now,” he said. “They all border adjust their taxes; America does not. As a result, madein-America products are at a tax disadvantage here in America and abroad as well.”
Level the playing field
As much as Brady wants to level the global playing field to retain American jobs and companies, some of the provisions of the Republican tax blueprint could draw flack at home.
In order to lower rates and enable simplified “postcard” filing, one of the home-state benefits Brady may jettison is the federal deduction for state and local sales taxes, which is worth about $1 billion a year to Texas taxpayers. According to some recent studies, it is used by about a fifth of Texas tax filers, saving an average of about $383 a year for those who claim it.
Texas, one of nine Republican-leaning states with little or no income tax, ranks third in the nation in the percentage of those who make use of the sales tax deduction, making it a sensitive issue for lawmakers in both parties. Though always contested, it generally has been renewed annually by successive Congresses over the past decade, something Brady himself has championed.
Although Brady says no decisions have been made, he has started to make the case for a change.
“Many Americans are surprised to learn that right now Washington raises their federal taxes so that some can try to get back part of their local sales and income taxes,” he said. “What we’re proposing is to lower tax rates for everybody.”