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Brady Skeptical of Calls to Tie Tax Reform to Welfare Reform

Posted on June 13, 2017 by Asha Glover and David van den Berg

House Ways and Means Committee Chair Kevin Brady, R-Texas, said June 12 that while he is open to addressing welfare reform this year, including it in tax reform efforts is not necessarily a main goal, despite calls from the House Freedom Caucus to make it one.

Brady told reporters that welfare reform was included in House Republicans’ broad “A Better Way” policy proposals, adding that while he is “anxious to see that move this session,” broad tax reform is ultimately the main goal. “I think let’s stay focused on tax reform. Let’s look for opportunities to advance welfare reforms this session,” Brady said.

Freedom Caucus member Jim Jordan, R-Ohio, on June 9 said that House Republicans are divided on passing a budget, which could affect the tax reform timeline. He added that the Freedom Caucus is considering accepting a higher budget figure if welfare reform is included in tax reform. Freedom Caucus Chair Mark Meadows, R-N.C., floated the idea of tying tax reform to reform of food stamps and the Temporary Assistance for Needy Families program, Politico reported June 9.

Brady told Tax Analysts that from his understanding, welfare reform and tax reform “are separated in their policies and their scoring.”

“One is about getting people back to work with real, good-paying jobs," Brady said. "The other is about making sure there are enough good-paying jobs for folks who are trapped in welfare.”

Ways and Means member Patrick Meehan, R-Pa., told Tax Analysts his hope is that “tax reform works on its own,” adding, “I think that’s the way we ought to approach it.”

However, Rep. Dave Brat, R-Va., another Freedom Caucus member, told Tax Analysts that welfare reform could make up for lost revenue if the border-adjustable tax is scrapped or if the Senate fails to pass healthcare legislation. The Senate is being unclear about its healthcare legislation following House passage of the American Health Care Act (H.R. 1628), which would reduce the baseline for tax reform by $1 trillion, while the chances of including the border-adjustable tax in a tax reform package is “50-50,” Brat said.

“If you lose out on $1 trillion on border-adjustable, where are you getting it? And you want the rates down to 15 or 20 [percent], so then you’ve got to find something, and the able-bodied welfare reform piece is huge, right? It’s a win-win. You’re getting folks off of government programs, back in the workforce,” Brat said, adding, “We’ve got numbers in the $400 billion ballpark from a few programs together.”

Brady reiterated that he is “convinced that a redesigned border adjustment tax does the best job of leveling the playing field between foreign products and U.S. products both here in America and abroad.”

Follow Asha Glover (@AshaSGlover) and David van den Berg (@TAtaxDavidVDB) on Twitter for real-time updates.