Senate Majority Leader Harry Reid, D-Nev., said he has no interest in participating in the bipartisan congressional effort underway to reform the tax code this year and won’t even move a bill unless it guarantees a big tax increase.
Reid told reporters Thursday he will not be sending his ideas about tax reform to the Senate Finance Committee, which set a July 26 deadline for lawmakers to submit ideas about how to proceed with a rewriting of the tax code.
Finance Committee Chairman Max Baucus, D-Mont., and the panel's top Republican, Sen. Orrin Hatch, R-Utah, wrote to the other 98 senators in late June seeking input, but Reid said he ignored it.
“I am a big believer in our committee system here,” Reid said. “It’s up the Finance Committee to bring to the Senate floor what tax reform should be. And I’m not going to be involved in this. I’m not on the committee. I’m not going to do it. I’m not even going to consider it. Frankly, I haven’t read the letter, don’t intend to.”
Reid’s dismissal of the bipartisan effort stems from the wide gap in philosophies about how to reform the tax code. Baucus, who is considered a more moderate Democrat, wants reform to include a combination of tax cuts and revenue increases. Reid, along with other Senate Democratic leaders, are insisting on substantial revenue increases of at least $975 billion, and already included that money their budget resolution.
“It has to be significant,” Reid said of the money that tax reform should add to the government coffers. “And the place to start would be the budget resolution that we passed.”
Democrats want the additional revenue used in part to offset spending cuts rather than to reduce the deficit and they are focused on closing tax code loopholes, not broadening the tax base, an idea Baucus wants to consider.
Baucus, who is retiring in 2014, said he will use the ideas collected from senators to mark up legislation after Congress returns from the August recess. Baucus and Hatch, in their letter last month, told senators they plan to use a “blank slate” approach that leaves out deductions, exclusions, credits and any preferences now listed in the current tax code.
The results of the Senate efforts will be combined at some point with a tax reform plan in the House, where Ways and Means Committee Chairman Dave Camp, R-Mich., is working on legislation to rewrite the tax code.
The Baucus-Hatch approach has received bipartisan praise and the endorsement of Erskine Bowles and Alan Simpson, the co-chairmen of President Obama’s bipartisan National Commission on Fiscal Responsibility and Reform.
Reid, flanked by other Democratic leaders, said tax reform isn't going to happen at all unless both parties first agree on how much new money it should bring in to the Treasury.
“To just have a hundred million or so, that’s not going cut it.” Sen Charles Schumer, D-N.Y., said. “So I agree with Leader Reid. We need significant revenues as a target for tax reform, and I agree with him that we ought to have that target before we before we actually start doing the details.”