House Speaker Paul Ryan hopes Tuesday to jump-start a tax reform effort that has become mired in intraparty feuding, mixed signals from the White House and the drawn-out debate over Obamacare.
In what his office billed as “his first major speech” on tax reform, Ryan (R-Wisc.) wants to assure increasingly nervous supporters that Congress is determined to push forward on taxes.
“We are going to get this done in 2017,” he will say, according to excerpts released by his office. “We need to get this done in 2017. We cannot let this once-in-a-generation moment slip. … Transformational tax reform can be done, and we are moving forward. Full speed ahead.”
Ryan’s office said the speaker “will talk about what tax reform looks like, not just the benefits,” though he’s not expected to go into “intricacies.”
Ryan will be speaking before the National Association of Manufacturers, a natural constituency for business-friendly tax reform.
But so far, the blueprint Ryan is pushing hasn’t received the full-throated industry support he and Ways and Means Chairman Kevin Brady (R-Texas) hoped for to counteract strong opposition to a key provision from companies in retail, energy and other import-heavy industries. The provision — called a border adjustment — would tax imports but not exports.
“We are actually unique in the world in the way we discourage capital from coming back to America and how we incentivize off-shoring jobs,” Ryan is expected to say. “This is not the kind of exceptionalism we should aspire to. … We must think differently, so that once again we make things here and export them around the world.”
However, Ryan’s office said “the particular mechanism must be sorted out with the administration” and that Ryan “will not litigate the issues currently being resolved between the House, Senate and administration.”
Some people closely watching the process hope Ryan’s speech encourages lawmakers to explain to voters why they might have to take tough votes on the issue later this year.
“Members need to have their constituents understand why this issue is important,” said Jeffrey Kupfer of Carnegie Mellon University, a former Bush administration official.
Ryan’s speech comes five months after Republicans took full control of Congress and the White House, igniting expectations for the first tax reform in more than 30 years.
But there are growing questions about whether the legislation can be finished this year, and not everyone expects a major pivot from Ryan on how he’s pushed his tax agenda for months now.
Impatient conservatives are urging Republicans to simply cut taxes and call it a day. Meanwhile, Senate Republicans have stepped up their role in the process.
Whether tax reform should add to the deficit has emerged as another flash point. The Ryan-Brady plan is intended to be deficit-neutral, but top members of the hard-line conservative Freedom Caucus have come out against the idea, and Treasury Secretary Steven Mnuchin has also said it’s unnecessary.
But that could end up requiring the tax cuts to expire, and Ryan is expected to make a strong case for permanent tax reform.
With GOP members on Ways and Means unable to reach consensus and other Republican House members urging Ryan and Brady to find an easy path to an agreement between the House, Senate and White House, Ryan has requested better alternatives from those who have complained about the blueprint.
He’s shown some willingness to alter the border adjustment idea to avoid long-term damage to businesses worried about its impact.
“We don’t want to have severe disruptions,” Ryan has said. “If you’re an importer or a retailer heavily dependent on imports, we don’t want to shock the system so much that it puts them at a disruptive disadvantage.”
If anything, though, the idea continues to lose ground. A proposal last week by Brady to phase in the plan over five years flopped. But there is no clear alternative.
Some will listen to Ryan’s speech for how much he continues to mount a strenuous defense of border adjustment or widen the offer to change it.
Meanwhile, Trump administration officials have been looking more to the Senate lately on tax reform, several lobbyists said. A number of senators are working on alternative provisions, and late last week, Senate Finance Chairman Orrin Hatch sent out a call to various interests for ideas.
Hatch said “the momentum for tax reform is at peak levels.” But the issue has taken a backseat in the chamber to the push to repeal and replace Obamacare.