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Freedom Caucus Looking for Details on Tax Reform, Schweikert Says

Posted on July 17, 2017 by Dylan F. Moroses, David van den Berg

The House Budget Committee will mark up the fiscal 2018 budget the week of July 17, House Majority Leader Kevin McCarthy, R-Calif., said July 14, but several conservative lawmakers have said they want more information before proceeding.

House Ways and Means Committee member David Schweikert, R-Ariz., told reporters that Republicans in his chamber are “trapped” in a legislative bind. Schweikert, a founding member of the House Freedom Caucus, said the conservative group is seeking details on tax reform. However, the group isn’t necessarily withholding support for a budget resolution until those details are resolved, he said.

“You have to know the budget resolution to be able to have the pathway” to achieve tax reform, he said.

Because the Senate is still negotiating reconciliation legislation to overhaul the Affordable Care Act, on top of Ways and Means Committee staff drafting a tax reform bill, there are still several outstanding details that play a role in what final fiscal 2018 budget resolution instructions will look like, Schweikert said.

House Freedom Caucus Chair Mark Meadows, R-N.C., said July 13 that the Senate changing its healthcare bill to keep some of the ACA’s taxes “changes the baseline for taxes,” which means also changing the reconciliation instructions for tax reform.

Disputing reports that Freedom Caucus members would withhold support from a budget resolution without tax reform details, Schweikert said that his caucus colleagues are looking for consensus on broader guidelines rather than the finer points that he noted have not been finalized.

“There’s a use of language problem around here, because I saw The Hill story yesterday saying that some Freedom Caucus members want this. I talked to those very Freedom Caucus members, and that isn’t what they meant. They just want to know what the boxes look like,” Schweikert said.

It will take “all of August just to build the models,” he added. Estimates pending from the Joint Committee on Taxation are an involved process, he said, citing the “complications of moving to a territorial system” as an example.

Previewing the upcoming debate on the budget resolution, Schweikert said the decision not to repeal the ACA taxes on high-income earners complicates things from both a scoring and budgeting perspective for passing tax reform through reconciliation, but added, “That’s life. . . . Welcome to the job.”

The House Freedom Caucus is “not there, from a budget agreement standpoint,” Meadows said July 13, but the group is willing to try to find a compromise.

There are “too many moving parts,” Meadows said, adding that decisions need to be made on tax reform, the reconciliation instructions, defense and non-defense discretionary spending levels, and offsets for mandatory spending reductions.

Clarity on spending plans appears close at hand. The House Appropriations Committee is expected to clear all 12 required appropriations bills by July 21, McCarthy said.

While Meadows and Schweikert said further details are needed, Rep. Tom Cole, R-Okla., told reporters July 13 that reconciliation instructions can be written without a tax reform framework. “I've never seen the budget interfere very much with what Ways and Means decided to do," he said.

An eventual tax bill will go through changes in a committee process, and amendments will be considered, and Congress members will negotiate over the bill, he said. “Believe me, the guys on Ways and Means want to cut taxes, don't worry about it,” he said. “The big challenge will be that they don't over-cut and don't hit their growth estimates and end up magnifying the deficit. That's a problem."

Ultimately, lawmakers must get tax reform right, said Rep. Dave Brat, R-Va., but deficit projections and pending legislative proposals may get in the way. “That’s why we want to stay here in August,” he said. “There is a real bottleneck if you don’t solve the first few things, healthcare votes and that. There is a multi-trillion-dollar problem related to tax reform,” and reform is “the gold standard.”

Stephen K. Cooper contributed to this article.

Follow Dylan F. Moroses (@Dmoroses3244) and David van den Berg (@TATaxDavidVDB) on Twitter for real-time updates.