Ryan: Halfway on tax reform would be ‘great’

Rep. Paul Ryan (Wis.) sounded open to the idea of overhauling the tax code just for businesses on Tuesday, becoming the latest top Republican to say he’s ready to deal with President Obama on tax reform.

{mosads}Ryan, the GOP’s most prominent voice on budget matters, and Republican lawmakers have long said that tax reform needs to deal with both the individual and corporate systems, in large part because many businesses pay taxes as individuals.

But, speaking to a group of corporate chief executives on Tuesday, Ryan said: “If we can get halfway toward comprehensive tax reform, as a step in the right direction, I think that’s great.”

Ryan, who will head the tax-writing House Ways and Means Committee come January, and the incoming Senate majority leader, Mitch McConnell (R-Ky.), have both declined to close the door on a business-only tax reform. Obama and the White House have showed much more interest in that idea than a more comprehensive approach.

But Ryan also made clear at the Wall Street Journal event that he thought negotiating a tax reform deal with the current White House would be a challenge.

For instance, Ryan said that dealing with the businesses that pay as individuals would be a “big wrinkle.” He added that Obama and other Democrats have also shown no willingness to give in on the higher tax rates for top-earning individuals that Democrats won in the fiscal cliff-deal two years ago.

“I just don’t know where this White House is going to come down on these things,” Ryan said, later adding: “We hear good talking. We’ll exhaust the possibilities.”

Most of Washington’s tax community — analysts, lobbyists, aides and lawmakers — are skeptical that tax reform can happen before Obama leaves office in 2017.

On Tuesday, Ryan said that tax reform would come together at some time within the next three years but tried to put most of the burden on Obama for whether it would happen while the president was in office.

The 2012 GOP vice presidential nominee’s comments came as part of a wide-ranging interview in which he also touched on his opposition to the Export-Import Bank, his desire to overhaul welfare programs, and his prediction that the Democratic healthcare law would “collapse under its own weight.”

He also reiterated that he would make a final decision on whether to run for president next year and that family considerations would have a big impact on his choice.

As he vowed to work toward tax reform over the next two years, Ryan insisted that a Congress fully controlled by the GOP would change budget rules to allow for more “dynamic” projections of tax bills.

“Dynamic” scoring projects that changes in the tax code have an effect on economic growth. Current scoring rules don’t but do try to gauge the impact that tax changes have on taxpayer behavior.

“I’d rather just call it accurate scoring, or reality-based scoring,” Ryan said. “You can expect changes to make more accurate our scorekeeping.”

Ryan said Tuesday that the current House Ways and Means chairman, Rep. Dave Camp (R-Mich.), was hamstrung by the current scoring rules in trying to craft his tax reform proposal. GOP leaders and the rank and file kept Camp’s draft at arm’s length when it was released in February.

But most Democrats oppose dynamic scoring, opening up another potential roadblock for tax reform next year.

On Tuesday, Ryan also blamed Obama and the White House for undercutting a deal to restore expired tax breaks, some indefinitely, that was being struck by Camp and Senate Majority Leader Harry Reid (D-Nev.).

Liberal Democrats in both chambers joined Obama in opposing the deal. But the president’s veto threat also illustrated both tensions between the White House and Senate Democrats, and the challenges that Obama and GOP lawmakers will have in negotiating next year.

Because of the White House’s involvement, Ryan said that extending tax breaks only through the end of this year is the best Congress can do, even though corporate leaders and the lawmakers themselves acknowledge it’s far from an ideal scenario.

“The president blew up the deal,” Ryan said. “We had a good one.”