Tax reform gets jolt of momentum from Baucus retirement announcement

Lobbyists and Republican senators are more optimistic about the prospects for tax reform now that retiring Sen. Max Baucus (D-Mont.) is eyeing it for his legacy. 

Baucus said Tuesday that his unexpected decision to forgo reelection in a conservative state would allow him to pour his efforts into a broad overhaul of the tax code — a goal he shares with House Ways and Means Committee Chairman Dave Camp (R-Mich.).

{mosads}“I’ll have a lot more time and energy to do it since I don’t have to campaign,” said Baucus, who is chairman of the Senate Finance Committee.

The Montana Democrat stressed in a statement that he was “not turning out to pasture because there is important work left to do,” and said he was “ready to roll up my sleeves and get to work.” His decision not to pursue elected office again, Baucus later said, could also help unify the two parties on tax reform.

“That’s the hope,” Baucus said. “That’s the goal.”

GOP operatives on K Street, including some previously skeptical of the senator’s ability to shepherd a tax overhaul through the Finance Committee, said reform has a real shot now that Baucus can pursue it free from the pressures of a reelection campaign.

Baucus has a good working relationship with Senate Republicans and with Camp, who has made tax reform his No. 1 priority and is facing his final term with the gavel.

“Max has made clear that his commitment to comprehensive tax reform that lowers rates and makes the code simpler and fairer for our families and job creators remains a top priority,” Camp said in a Tuesday statement that also referred to Baucus as a “true legislator.”

“I couldn’t agree more, and I share his vision for enacting real tax reform this Congress.”

But even with the newfound optimism, Baucus faces significant challenges in pushing a tax reform package through his committee.

Baucus’s lame-duck status could limit his sway with fellow Democrats and the White House, and there’s no guarantee that Senate Majority Leader Harry Reid (D-Nev.) would take his panel’s product to the chamber floor. 

Democrats and Republicans, meanwhile, remain miles apart on whether a revamp of the tax code should raise more revenues.

Baucus, who voted against the budget plan from Senate Democrats, has said that he wants to tread a middle path between a House GOP budget that raises no new revenues and the $975 billion in tax increases passed by the Senate. 

Most recently, Baucus saw party leaders bypass his panel and bring an online sales tax measure championed by Senate Majority Whip Dick Durbin (D-Ill.) — and opposed by the Finance chairman — straight to the floor. 

With that in mind, top GOP lawmakers said they had concerns that Baucus would have trouble building support for tax reform on his side of the aisle.

“It’s a tough environment whether you’re retiring or whether you’re going to stay here for another 10 years,” Sen. Chuck Grassley (R-Iowa), who has worked with Baucus for years on the Finance Committee, told reporters on Tuesday.

“It doesn’t look good, if he is the chief proponent on the Democratic side,” said Senate Minority Whip John Cornyn (R-Texas), who also serves on the Finance panel. “They are running out of time. If we have to deal with immigration and the debt ceiling, I don’t think we have the time.”

Even some Democrats have said that Baucus would struggle to get others in the party on board with a bipartisan tax reform deal, a climb that could be even more difficult as a lame-duck chairman.

Sen. Ben Cardin (D-Md.), also a Finance member, said that Baucus had been holding productive weekly meetings with tax writers from both parties on the process for reform, but that he was far from certain that the political climate would allow a bill to get done. 

“I think he is focused on getting a better policy tax code, and has the sense of where the members’ views are on it to try to put together a comprehensive bill,” Cardin said. “If it becomes possible — now, a lot of it’s beyond the control of our committee.”

Some advocates for tax reform say it’s hard to understate how much more freedom Baucus will have now that he doesn’t have to face voters next year, and how badly both Camp and Baucus want a tax code overhaul that would cement a legacy for both men.

“Worrying about reelection, tax issues important to Montana and tax issues important to a more liberal Senate caucus put Sen. Baucus in a challenging situation,” John Guzik, a GOP lobbyist and former aide to Camp, told The Hill. “Baucus will now be able to spend the necessary time to get the job done without the distractions of a campaign.”

Both lawmakers and K Street veterans have also said that Senate Democratic leaders could be forced into action, should the House and Senate Finance take action. Camp has received a coveted legislative slot for a tax reform bill, and has stressed repeatedly that he plans to clear a measure out of his committee this year — though some Democrats on the panel doubt that product would be bipartisan.

“It will take that pressure off and it also liberates him a little bit from the demands of his leadership that he mark up a tax bill that has a trillion-dollar tax increase in it,” Sen. John Thune (S.D.), a member of GOP leadership and a Finance member, said about Baucus’s retirement. “I think Sen. Baucus would like to have this as an achievement on his way out.”

Sen. Orrin Hatch (Utah), the ranking Republican at Senate Finance, added that he believed Democrats would want to see Baucus off in style, despite the Montana senator’s differences with others in the party.

“I think decent people will want to see him retired in — I don’t want to say glory, but retire in real happiness,” Hatch said. “I would think his colleagues should want to help him every step of the way.”