Tampa Bay Times
Lobbyists swarm undefined tax reform
WASHINGTON — Republicans are barreling into a lobbying frenzy next week, when House Ways and Means Chairman Kevin Brady plans to unveil a sweeping tax bill to remake the U.S. economy that’s being crafted with rigorous secrecy.
The stage was set with the House’s adoption Thursday of a budget resolution designed to speed the course of tax legislation and kick off a three-week sprint toward a House bill. Now, lobbyists representing every corner of the economy are poised to first devour, then attack what may be hundreds of pages of legislation that Brady says he’ll release Nov. 1.
Special interests from Realtors to dairy farmers will be trying to save their industry-specific tax breaks, said Tim Phillips, president of Americans for Prosperity. His group, which is backed by billionaire industrialists Charles and David Koch, supports ending such breaks.
“It’s pretty fierce,” Phillips said. “We met with Brady on Tuesday and he was saying their offices are swamped with all the special interest groups swarming in asking to be protected.”
President Donald Trump has promised that middle-class Americans will be the biggest beneficiaries of the tax overhaul. But it remains to be seen which groups will lose their advantages — a necessary step to help pay for cutting tax rates. Even Republican members of Brady’s committee say they don’t know whether any decisions have been made.
“The problem is that Ways and Means has somewhat been kept out of the loop with details,” Rep. Jim Renacci of Ohio, a member of the House tax-writing panel, said in an interview. “There are still a lot of hurdles to get it done.”
Leaving such details under wraps has become “almost a double-edged sword,” said lobbyist Will Hollier, whose clients include Microsoft Corp. and Visa Inc. The secrecy has allowed for some efficiency, but it’s also prevented GOP leaders from winning broad support for the legislation in their own conference so far, he said.
A key test will be how House leaders deal with the state and local tax deduction, the first flash point in the debate. Trump and congressional leaders have proposed abolishing that break, which benefits high-tax states that tend to vote Democratic. But several Republican House members from such states want to preserve the break in some form.
“Can you get people to put their party loyalty above homegrown constituents’ concerns?” said Hollier, a former chief of staff and legislative director for Sen. Mike Crapo, an Idaho Republican. “How they deal with that will show that people can be broken.”
A spokeswoman for the Ways and Means Committee declined to comment.
The tax framework that the White House and GOP leaders released on Sept. 27 calls for tax rate cuts for individuals and corporations, and is estimated to raise the deficit by $2.4 trillion. Republicans need to get that number down to $1.5 trillion under their budget parameters — a difficult balancing act as they’ve promised a more generous Child Tax Credit and bigger tax breaks for middle-income families.
“I don’t think that people realize that 80 percent plus of this effort is eliminating things in the code,” said Sen. Bob Corker of Tennessee, who has called for a tax bill that won’t add to the federal deficit after taking into account reasonable economic growth expectations.
“I mean, over the next two weeks, especially when the Senate tax-writing committee puts their stuff out, they’re going to realize that this the biggest tax code rewrite since 1986 and it’s going to affect everyone,” he said.
On the individual side, the treatment of state and local deductions remains in question. At least 12 Republicans from high-tax states, whose constituents stand to lose if the tax break is repealed, voted no on the House budget Thursday. The most vocal among them have demanded a compromise on the issue.
Democrats, meanwhile, are also waiting to pounce. Brady has so far resisted pressure to embrace Trump’s call for making no changes to the tax-protected status of 401(k) retirement plans. Five Democratic senators — Debbie Stabenow of Michigan; Sherrod Brown of Ohio; Ron Wyden of Oregon; Ben Cardin of Maryland; and Bob Casey of Pennsylvania — on Thursday signed a letter warning Republicans against “reducing the opportunities that millions of Americans have to save for their retirement.”
Special interests line up to try to save their tax breaks, but the bill hasn’t been released.