Senate Democratic Leaders Mull Tax Reform Via Budget Reconciliation

Senate Budget Committee Chairman Patty Murray, D-Wash., announced on January 23 that she plans to move a fiscal year (FY) 2014 budget through her committee despite the Senate’s failure to approve one over the past four years. Murray and her fellow Democrats are also planning to include revenue raisers as opposed to just spending cuts in order to reduce the federal deficit, and some members of leadership are contemplating including tax reform as part of the budget process.

“Democrats are eager to contrast our pro-growth, pro-middle class budget priorities with the House Republicans’ Ryan budget that would end Medicare as we know it, gut investments in jobs and programs middle-class families depend on, and cut taxes for the wealthiest Americans and biggest corporations,” said Murray. “I’ll be working with the chairman of the Finance Committee, [and the] members of my budget committee, to make a determination now on the best path forward on the answer.”

That path includes changes to the tax code, according to Senate Democratic Policy Committee Chairman Charles E. Schumer, D-N.Y. Speaking on NBC’s “Meet the Press” on January 20; Schumer said the government needs more revenues as well as more spending cuts to get the deficit down. “In our budget that we will pass, we’ll have tax reform,” said Schumer. “I’ve talked to [Senate Majority] Leader [Harry] Reid, D-Nev.; I’ve talked to Budget Chair Murray; we’re going to do a budget this year, and it’s going to have revenues in it, and our Republican colleagues better get used to that fact.”

Senate Finance Committee Chairman Max Baucus, D-Mont., however, said talk of tax reform as part of the budget reconciliation process is premature. His Republican counterpart on the committee, ranking member Orrin G. Hatch, R-Utah, stands adamantly opposed to the idea. House Democrats also oppose linking tax reform to the budget. Nonetheless, Senate Democratic leaders are pressing forward with the idea.

“Up to this point, Sen. [Mitch] McConnell, R-Ky., and some Senate Republicans have refused to engage at deficit-reduction discussions that included revenue and spending cuts,” said Senate Majority Whip Richard Durbin, D-Ill. “The amount of revenue that we generated after the fiscal cliff negotiation is still short of any of the numbers that were suggested either by Simpson-Bowles or by the Gang of Six,” he continued. “We all understood that if we’re going to have to spending cuts, balanced spending cuts, it includes revenue. There’s room within the tax cut for us to reduce the deficit and still protect the middle class and promote growth.”

Whatever route the committee decides to take, the budget process for FY 2014 promises to be a major battle between a re-invigorated Democratic party and Republicans. “Senate Democrats plan to move on a budget resolution regardless of whether the House rolls this issue into their short-term bill to increase the debt limit. I am ready to get to work with my colleagues on the Budget Committee and I look forward to fighting for middle-class budget values and priorities in a conference with Chairman [Paul] Ryan, R-Wis., and the House,” said Murray.

By Jeff Carlson, CCH News Staff

 

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