Baucus, Hatch: Revenue question not settled

But that statement prompted fierce pushback from Baucus’s office – underscoring the challenges the two senior lawmakers face on tax reform, even as they work together on their current “blank slate” approach.

{mosads}Sean Neary, a spokesman for Baucus, noted that the Finance chairman has consistently said – and told his caucus this week – that a reformed tax system would raise more revenue.

“There is no agreement. Senator Baucus believes there should be revenue,” Neary told The Hill in an e-mail. “This issue will continue to be debated as part of the bipartisan process that Senator Baucus is working on with Senator Hatch.”

“Chairman Baucus has said over and over that tax reform must raise revenue for deficit reduction in addition to lowering tax rates,” Neary added. “His stance has never changed.”

The joint statement from Baucus and Hatch’s office later conceded that “the issue of raising revenue through tax reform is clearly a subject of great debate amongst both parties.”

“The main question is not whether tax reform raises revenue,” the statement added. “It’s what is done with the revenue raised through closing loopholes, simplifying the code and making other adjustments. That is the question that still needs to be answered and will be resolved through this process.”

Baucus and Hatch are currently inviting their 98 counterparts to make recommendations about what tax breaks should be put back into the code, after saying last month that they were a starting a process that would essentially wipe the code clean of preferences. Senators have until July 26 to give their input to Baucus and Hatch.

But lawmakers on both sides of the aisle have said they’re skeptical of the “blank slate” process. Senate Minority Leader Mitch McConnell (R-Ky.) said this week that “I don’t see how we get anywhere” on tax reform, because Democrats are insisting that a rewritten code raise more revenue.

Senate Majority Leader Harry Reid (D-Nev.), meanwhile, stressed that he agreed with Baucus and Hatch’s process, but that “we’re a long way from getting something on paper as to what we’re going to go forward on.”