Tax Reform Could Factor Into Budget Deal, GOP Leaders Say

With some House Republicans reportedly seeking a “grand bargain” to fund the government and raise the debt limit, tax reform could play a role.

House Ways and Means Committee Chairman Dave Camp (R-MI) told reporters last week that he still hopes to tie an overhaul of the tax code to whatever deal emerges to end the budget stalemate and raise the debt limit.

“Obviously I think there’s an opportunity in this for tax reform instructions to be put in somewhere,” Camp told Bloomberg BNA.

House Republicans have already suggested that tax reform instructions could be linked to the debt ceiling negotiations, but there are now reports that House Speaker John Boehner (R-OH) and others in his caucus would like to craft a “grand bargain” that combines a spending bill to fund the government into December with a debt ceiling increase and a number of sweeteners that could appeal to both parties. The add-ons could include entitlement reform (such as means-testing Medicare and raising the age for Social Security), a repeal of the medical device tax, and instructions for fast-tracking tax reform.

President Obama has repeatedly said he will not negotiate around the debt ceiling, and Democrats in general want more revenue out of any long-term budget deal. Obama said in a television interview last week that revenue could be raised by closing loopholes in the tax code instead of raising income tax rates on high earners.

“It is possible for us to make sure that we are not increasing the income tax rate,” Obama said. “I think that we’re going to have to close the loopholes in order to pay for those things that are going to help us grow.”

Senate Majority Leader Harry Reid (D-NV) also brought up tax reform in a letter to Boehner last week, suggesting that House-Senate budget conferees could have a discussion about a number of fiscal issues facing the nation as soon as the House agrees to pass a clean short-term bill to fund the government.

“This conference would be an appropriate place to have those discussions, where participants can raise whatever proposals—such as tax reform, healthcare, agriculture, and certainly discretionary spending like veterans, National Parks, and [the National Institutes of Health]—they felt appropriate,” Reid said.

ASAE last month delivered a letter to tax-writing committees in both chambers encouraging Congress to bear in mind how various tax reform proposals might affect the nation’s association community. The letter, delivered to leaders of the House Ways and Means Committee and the Senate Finance Committee, said associations are closely watching the tax reform debate and are particularly concerned about possible changes that would expand the definition of “unrelated business income” in the tax code.


Chris Vest, CAE

By Chris Vest, CAE

Chris Vest, CAE is vice president, corporate communications and public relations at ASAE. MORE

Got an article tip for us? Contact us and let us know!