White House Rejects Baucus-Camp Approach To Tax Reform


Senior White House officials have dismissed Senate Finance Committee Chairman Max Baucus’ efforts to reach a tax reform compromise with his House GOP counterpart absent a commitment to raise new revenue from top earners.Baucus, a Montana Democrat, and House Ways and Means Committee Chair Dave Camp, a Michigan Republican, co-authored a Sunday Wall Street Journal op-ed suggesting their efforts won’t be geared toward devoting revenues toward deficit reduction but toward lower rates.

“We’ve agreed that tax reform should result in a system that is as progressive as the current one,” they wrote. “Tax reform will close special-interest loopholes to help lower rates. We will ensure that low-income and middle-income Americans will pay no more taxes than they do under current law.”

Lowering rates, sure — reducing deficits, not so much.

Beyond authoring the op-ed with Camp, Baucus has said very little publicly about their negotiations, beyond that the question of where to allocate revenues from base-broadening should be answered later. According to Camp, though, “We both agree that comprehensive, revenue-neutral tax reform is the right thing now.”

Such an approach would be directly at odds with the White House and Senate Democratic leadership. And at a background briefing on the budget Tuesday evening, two senior White House officials rejected the Baucus-Camp approach.

Obama, they noted, is open to realizing the $580 billion in income tax revenue in his budget through a tax reform process, provided any reforms are as progressive as the current code. But he’d oppose efforts to reduce tax expenditure benefits for higher-income earners, only to plow those revenues into lowering the same earners’ rates. That, they noted, would close the door on revenue they insist needs to be applied to reducing deficits.

One official pointed to comments from Senate Democratic aides noting that tax reform won’t happen on Baucus’ terms if he goes off the reservation. But Baucus is up for reelection in red Montana this year. And if he defies the White House and leadership in pursuit of non-viable tax reform, he’ll undermine a Democratic Party tax consensus that took leaders years to build.