Ryan lays out end-of-year dead­line for tax re­form

Pence prom­ises largest rate cuts since Rea­gan

The Washington Times Daily - - POLITICS - BY DAVID SHERFINSKI

House Speaker Paul D. Ryan vowed Tues­day that Congress will ap­prove a broad-based over­haul of the fed­eral tax code this year, lay­ing down a firm dead­line for Repub­li­cans as he tries to smooth over in­tra­party dif­fer­ences that have plagued the ef­fort thus far.

The White House on Tues­day also en­dorsed an ag­gres­sive timetable. Vice Pres­i­dent Mike Pence said Amer­i­cans can ex­pect the largest tax cut since the Rea­gan ad­min­is­tra­tion by the end of the year.

How­ever, Mr. Ryan said the re­form pack­age must be per­ma­nent, which could force Repub­li­cans to obey par­lia­men­tary rules that would con­strain the size and scope of the over­haul.

Set­ting an op­ti­mistic tone, Mr. Ryan said nei­ther pol­icy spats nor con­tro­ver­sies in­volv­ing Pres­i­dent Trump will de­rail Repub­li­can ob­jec­tives. Speak­ing to the Na­tional As­so­ci­a­tion of Man­u­fac­tur­ers, Mr. Ryan didn’t try to solve the pol­icy dis­putes, but in­stead looked to in­fuse fresh en­ergy into the process and to re­as­sure cor­po­rate lead­ers who have be­gun to doubt Repub­li­cans’ abil­ity to de­liver on ma­jor cam­paign prom­ises.

“We are go­ing to get this done in 2017,” the Wis­con­sin Repub­li­can said in what his of­fice billed as his first ma­jor speech on the is­sue. “We have to get this done in 2017. We can­not let this once-in-agen­er­a­tion mo­ment slip by.”

Mr. Ryan said “de­fend­ers of the sta­tus quo” are count­ing on law­mak­ers to lose their nerve or de­lay the ef­fort to lower in­di­vid­ual and cor­po­rate in­come tax rates.

He said one rea­son to make the re­form per­ma­nent is to avoid the ex­pe­ri­ence of the Bush-era tax cuts, which ex­pired af­ter a decade.

“Busi­nesses need to have con­fi­dence that we won’t pull the rug out from un­der them,” he said.

But sig­nif­i­cant dis­putes re­main. One of them is a tril­lion-dol­lar bor­der tax fa­vored by Mr. Ryan that has met a cool re­cep­tion from the White House, Se­nate Repub­li­cans and even some in the House Repub­li­can con­fer­ence.

Mr. Ryan said in a CNBC in­ter­view af­ter his speech that the “bor­der ad­just­ment” tax isn’t dead, but he ac­knowl­edged that a full, im­me­di­ate 20 per­cent tax on im­ports wouldn’t work.

“What we’re do­ing right now [with] the tax writers is we’re just com­par­ing and con­trast­ing var­i­ous ver­sions of re­forms to get the best pos­si­ble one that gives us the low­est pos­si­ble rates and the most in­ter­na­tion­ally com­pet­i­tive tax sys­tem, and [the] best one we can pass,” he said.

The bor­der tax is at­trac­tive to some be­cause it would pro­duce a mas­sive amount of rev­enue, giv­ing law­mak­ers more space to cut tax rates. But re­tail­ers and im­porters say it would add 25 per­cent or more to the cost of many goods sold in the U.S., which they warned would hit con­sumers and sour the econ­omy.

Even some con­ser­va­tives who are largely on board with Mr. Ryan’s broader ef­forts say the speaker needs to let go of the bor­der pro­posal.

“The bor­der ad­just­ment tax is re­ally dead, and it’s up to us to make sure that we put forth a pro­posal that does what we said we would do,” Rep. Mark Meadows, North Carolina Repub­li­can and chair­man of the con­ser­va­tive House Free­dom Cau­cus, said Tues­day on Fox Busi­ness Net­work.

Some an­a­lysts had ex­pected Congress to be fur­ther along in set­tling the pol­icy dis­putes on tax re­form. Con­ser­va­tives have floated the idea of can­cel­ing the Au­gust re­cess to try to make head­way.

The White House said those de­ci­sions are up to Congress, but press secretary Sean Spicer said a bi­par­ti­san consensus for action seems to be emerg­ing.

Still, the sched­ule is crowded. The Oba­macare re­peal ef­fort is tak­ing most of the en­ergy on Capi­tol Hill, and law­mak­ers are in­vest­ing time in in­ves­ti­ga­tions of the Trump ad­min­is­tra­tion.

This fall, Congress will have to deal with the gov­ern­ment’s debt ceil­ing as well as the an­nual crush of spend­ing bills.

Democrats say they fear a skewed pack­age will emerge from Repub­li­can ne­go­ti­a­tions and that Mr. Ryan pa­pered over prob­lems on Tues­day.

“He did not tell them that un­der their plan, an in­di­vid­ual in the top one-tenth of 1 per­cent of in­come gets a $1.4 mil­lion tax cut while a mid­dle-in­come house­hold re­ceives barely $60,” said Rep. John A. Yar­muth of Ken­tucky, the rank­ing Demo­crat on the House Bud­get Com­mit­tee. “And he con­ve­niently left out that their plan would grow the debt by $3 tril­lion.”

Democrats have hinted that they may try to block a debt limit in­crease if they don’t like the Repub­li­cans’ pro­posed tax cuts.

“If they’re go­ing to put on the table a mas­sive tax cut for the very wealthy that in­creases the deficit by tril­lions, it’s harder to get Democrats to in­crease the debt ceil­ing,” said Se­nate Mi­nor­ity Leader Charles E. Schumer, New York Demo­crat.

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