Retiring Camp on tax reform: ‘It can be done’

As he prepares to leave Congress, House Ways and Means Chairman Dave Camp (R-Mich.) says priming congressional Republicans for the difficulties of tax reform could be one of the bigger legacies of his four years atop the powerful committee.

Camp released a tax reform discussion draft in February, which pared back even the most popular of tax breaks. Speaker John Boehner (R-Ohio), a longtime friend of Camp, famously responded to the draft with a “blah, blah, blah, blah.” Rank-and-file House Republicans wondered aloud why the GOP would propose rolling back popular policies in an election year.

{mosads}But as Camp told The Hill in an interview this week, his discussion draft – crafted after more than three years of work – showed that “it can be done. I think a lot of people thought it was really hard to do.”

In the process of drafting his proposal, Camp said he met with more than 100 House Republicans to talk through those challenges, even as leadership grew increasingly skeptical that moving forward with tax reform was a good idea.

“The criticism was often behind the scenes,” Camp said. “The leadership at least let the committee write the bill.”

Camp will leave the Capitol at the end of the year after almost a quarter century in Congress, after declining to run for an open Senate seat in Michigan in what turned out to be a good GOP year.

On his way out, Camp said he was disappointed that his push for tax reform didn’t get further, and maintained that the recent pattern of Congress careening from crisis to crisis over matters like the debt ceiling didn’t help his odds of making progress on revamping the tax system. Camp, for instance, has long blamed last year’s government shutdown, driven by GOP efforts to defund President Obama’s healthcare law, for blunting the momentum for tax reform.

But he also insisted that he didn’t regret going all-in on overhauling the tax code, a Herculean task that he and former Senate Finance Chairman Max Baucus (D-Mont.) put first over other priorities like trade policy and shoring up Social Security and Medicare.

“You plant a flag, and hope you can get across the finish line,” Camp said Tuesday. “I’m very pleased that a discussion draft was completed. Would I have liked to get it across the finish line? Absolutely.”

Even in his final weeks as a lawmaker, Camp is still trying to set the stage for tax reform, a process that his successor, Rep. Paul Ryan (R-Wis.), has projected will take another one to three years.

Camp is currently trying to hash out a deal – with a divided group of Democrats – to extend a slew of tax breaks that expired at the end of last year. Only after he wraps that up, Camp said this week, would he make any decisions about his plans after Congress. The Michigan Republican didn’t rule out lobbying as a next venture, though he noted he would have to wait a year to lobby his former colleagues.

In the meantime, if Camp can get some of those extended provisions, like the popular credit for business research, extended for good, Ryan will have more leeway in his tax reform efforts – potentially allowing the new chairman to write a plan better suited to get broad GOP support.

Easing the path even more, Camp said the fact that his tax reform draft was the first to be scored dynamically – meaning congressional scorekeepers projected the proposal would increase economic growth – would have an impact long after he left Capitol Hill.

The Joint Committee on Taxation said that Camp’s draft would spur anywhere from $50 billion to $700 billion worth of economic growth, in projections beyond its traditional “static” scores that take taxpayer behavior into account but don’t forecast economic growth.

In his proposal, Camp didn’t use that extra money from the dynamic score to help pay for lower rates, as some conservatives wanted.

But Ryan has already said he wants to make greater use of dynamic scoring when he’s Ways and Means chairman, despite objections from key Democrats. That could add even more divisions to the debate over tax reform, given the divide between Democrats and Republicans over whether an overhauled tax code should raise more revenue for government and whether the reform debate should center on U.S. businesses.

Still, Camp said that, while Democrats might not like dynamic scoring, “it’s certainly more reflective of the effects of a tax reform bill than a static score.”

“The score is what it is. That’s like saying you don’t like a CBO score,” Camp added, referring to Congress’s official voice on budget matters. “JCT is the scorekeeper.”

By not using the dynamic revenue to lower rates, Camp was forced to slash very popular tax breaks like the deduction for home mortgage interest. He also took some heat from both GOP lawmakers and the financial services industry for a tax on big banks that helped lower the corporate rate from 35 percent to 25 percent.

“There were clearly a few voices who were either close to the industry or had significant industry interests in their district,” Camp said, even while arguing that the idea that there was a backlash against the bank tax was overblown. “Many privately applauded me for doing what I did.”

But like with other fiscal matters, the rank-and-file, Camp said, also learned that the math surrounding tax reform was difficult. While lawmakers have said they’re happy to exchange tax breaks for lower rates, the most expensive tax breaks are also among the most popular.

To help spur further momentum for tax reform after he’s gone, Camp has said that he hopes the White House becomes more engaged on what Obama has called a priority.

Even if they don’t, Camp said that tax reform would have to get done eventually, even if at great cost.

“Every conference and every leadership is going to have to struggle with this,” he said.