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Democrats Meet With Brady as GOP Seeks Consensus on Tax Reform

Posted on April 6, 2017 by Dylan F. Moroses, Asha Glover

Following an April 5 meeting between House Ways and Means Committee Chair Kevin Brady, R-Texas, and committee Democrats, the ranking minority member said he found some consensus with Brady in discussing infrastructure spending.

House Ways and Means Committee ranking minority member Richard E. Neal, D-Mass., told reporters, “I did ask for one position that I thought was essential on the infrastructure side, which the chairman agreed with me [on] . . . that if they’re going to use dynamic scoring for the tax cuts, I requested that we use dynamic scoring for infrastructure spending. He agreed with that.”

Neal said that Brady also discussed broad ideas surrounding repatriation, but noted he thought that nothing included in the GOP tax reform blueprint, like using repatriated funds for statutory rate cuts, was considered a certainty. “I thought he mentioned connecting that to infrastructure spending.”

Neal left the meeting with some advice for his committee's Democratic members. “What I would propose now to the Democrats on the committee is that the staff, in terms of their specialties, go through each one of the proposals that Republicans are going to lay out, spend some private time in the committee library here for days or weeks if necessary so we can have a full understanding of the implications of what they’re proposing.”

Neal characterized the discussion as more about “what they would like to do” than a sales pitch for the “Better Way” blueprint. Ultimately, Neal said Brady asked Democrats to “start from the acknowledgment about how damaged the current tax code is, [and] that we try to find some areas, even if we can’t have overall agreement, that we find some areas of agreement.”

The Trump administration also signaled there could be an opportunity for bipartisan consensus on tax reform, following an April 4 meeting between moderate Democrats and White House officials. White House Director of Legislative Affairs Marc Short told reporters in an April 5 briefing that “Democrats have reached out to say that they want to help on this process too. They recognize it’s been 30 years since significant tax reform was done. . . . I think there will be bipartisan interest to work on tax reform.”

However, House Speaker Paul D. Ryan, R-Wis., told reporters that Republicans would have to find consensus among themselves in the White House, House, and Senate before making progress on tax reform legislation that uses budget reconciliation. “Tax reform from a Republican standpoint is easier than healthcare because reconciling tax reform, you can put everything you want in tax reform in a reconciliation bill -- you don’t have to leave things outside of it. Healthcare, that’s not true” because Senate rules prevent aspects of healthcare reform, such as interstate shopping, from being included in a reconciliation bill, Ryan said at a WisPolitics luncheon.

Ryan contrasted healthcare reform, which the White House, House, and Senate worked together on, with tax reform, for which only the House has a plan prepared. Healthcare reform "was a joint operation by the three already. We don’t yet have that in tax reform so we couldn’t go with tax reform first,” he said.

Ryan also defended the border-adjustable tax in the House blueprint, saying that it would help to bring American businesses back to the country. “It makes sense in tax law to shift your manufacturing and profits overseas. Right now the American tax code tells the American producer: outsource your supply chain, make your stuff overseas, then bring it back into America. We don’t want to keep incentivizing that. We want it to make sense to make things in America.”

Paul, Meadows Push FATCA Repeal

As tax reform discussions continue to escalate, a bicameral pair of Republicans are teaming up again to issue legislation that would repeal the Foreign Account Tax Compliance Act, which requires Americans to file annual reports on their foreign financial holdings.

Sen. Rand Paul, R-Ky., and House Freedom Caucus Chair Mark Meadows, R-N.C., sent a letter to Treasury Secretary Steven Mnuchin and Office of Management and Budget Director Mick Mulvaney April 3 urging administrative actions that could be taken to “mitigate the ongoing damage caused by FATCA, pending its repeal.”

Paul and Meadows plan to reintroduce legislation to repeal FATCA on April 6. They introduced H.R. 5935 last session in September.

David van den Berg contributed to this article.

Follow Dylan Moroses (@DMoroses3244) on Twitter for real-time updates.